Why Is Sky Quarry Stock (SKYQ) Up 43% Pre-Market Today?

Shares in Sky Quarry (SKYQ), the U.S. integrated energy solutions company, climbed as high as 43% early Monday, extending its 72.7% rally from Friday. The boost on Monday came as oil prices surged past $100 per barrel on the imminent U.S. naval blockade of Iranian ports.

Sky Quarry Positions for Higher Refining Margins

Sky Quarry recycles waste asphalt shingles into usable energy products like oil and asphalt. It also refines heavy oil into diesel and other petroleum products.

The company operates the Foreland Refinery in Nevada and benefits from higher oil prices. A spike in oil prices can tighten regional fuel supplies and push up refined product prices faster than refiners’ contract and inventory costs adjust, temporarily expanding refining margins until markets rebalance.

This dynamic is particularly relevant for Sky Quarry, which operates Nevada’s only refinery at a time when the state is importing less fuel from California following refinery closures there. On April 2, SKYQ surged by over 101% after the company noted that the U.S.-Israel-Iran war and California’s refinery setbacks position its company for gain.

Retail Traders Zero In on Sky Quarry

Moreover, as a penny stock, Sky Quarry’s shares have been on retail traders’ watchlists, fueling its rally over the past few days. On April 7, SKYQ soared by more than 27%.

This has given the shares the top technical rating among U.S. companies with small market capitalizations.

Is Sky Quarry a Good Stock to Buy?

All of TipRanks’ AI analysts have a Neutral (Hold) rating on Sky Quarry’s shares. For instance, the analyst based on OpenAI-5.2 rates SKYQ with a score of 47 out of 100, pointing to the company’s financial weakness.

Specifically, the analyst cited the company’s shrinking revenue, large losses, rising leverage, and ongoing cash burn. The model’s price target of $12.50 implies about 1% downside risk.