Aug. 28 (Bloomberg) -- Ecopetrol SA, Colombia’s state-controlled oil company, rallied to its highest level in four months as crude advanced on speculation that the U.S. will take military action in Syria.
Shares gained 2.2 percent to 4,465 pesos at 12:51 p.m. in Bogota, which would be the highest on a closing basis since April 11. Ecopetrol was the biggest contributor to a 1.1 percent gain in the Colcap index.
Oil reached a two-year high on speculation the conflict in Syria will threaten supplies from the Middle East. West Texas Intermediate oil climbed 1 percent to $110.07 a barrel in New York after jumping as much as 3 percent earlier in the day.
The correlation between oil prices and Ecopetrol shares means there’s an “upside risk to the stock under a bullish oil price scenario,” HSBC Holdings Plc analysts led by Luiz Carvalho wrote in an Aug. 26 report. “Ecopetrol is one of the most oil-leveraged names worldwide.”
Ecopetrol shares have an R squared of 0.66 to rising oil, a measure of the stock’s movements that can be explained by crude prices, according to the HSBC report. A coefficient of 1 represents perfect correlation.
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