Hess shares rally to high after Goldman Sachs upgrade

The gains came as crude oil prices surged to a new record above $122 a barrel. Other oil-sector stocks also rallied.

Goldman Sachs analyst Arjun N. Murti added Hess to the investment bank's "America's Buy List" after predicting that oil prices could reach as high as $150 to $200 a barrel over the next 6 months to two years.

"Given the company's favorable oil leverage and highly prospective exploration program we believe Hess shares will continue to outperform in an environment of high and rising oil prices," Murti said in a note to investors.

The analyst suggested the stock could rise above his price target of $130, noting that "the possibility that shares trade closer to our $150, 'high-end' trading range is increasingly likely."

Before the upgrade, Murti said he had been waiting for share prices to ease before again recommending the stock, which he previously rated "Neutral."

"However, given our increasingly bullish crude oil view and updated asset value and risk/reward analyses, we believe the chances for a meaningful pullback have decreased," he said.

Separately, credit rating agency Fitch Ratings raised Hess's issuer default rating, senior unsecured notes/debentures rating and senior unsecured bank facility rating to "BBB" from "BBB-." Fitch also raised its outlook on the company to "Stable" from "Positive," saying the company's operational performance is improving.

Hess shares jumped $8.59, or 7.9 percent, to $116.86, after earlier rising to a new all-time high of $117.99. The stock hit a previous high of $116.81 on April 22.