Oil & Gas Stock Roundup: SLB & HAL's Q1 Earnings, CVX's Canadian Sale & More
Zacks Investment Research | Apr 25, 2017 03:57AM ET
It was a week where both oil and natural gas prices suffered big losses.
On the news front, oilfield service majors Schlumberger Ltd. (NYSE:SLB) and Halliburton Co. (NYSE:HAL) kicked off the energy earnings season. Importantly, both the companies indicated that activity in North America have improved but it would still take some time for international operation to rebound. Meanwhile, the second-largest U.S.-based oil company Chevron Corp. (NYSE:CVX) agreed to sell its Canadian oil refining and marketing business for $1.5 billion.
Overall, it was a brutal week for the sector. West Texas Intermediate (WTI) crude futures lost 6.7% to close at $49.62 per barrel, while natural gas prices fell 3.9% to $3.101 per million Btu (MMBtu). (See the last ‘Oil & Gas Stock Roundup’ here: Conoco, Williams Partners' Asset Sales; NuStar's Permian Push and More .)
Suffering its first loss in a month, oil prices were pressured by the U.S. government data that showed a surprise build in U.S. gasoline stockpiles - pointing to stuttering demand for the fuel in the summer driving season. The continued growth in U.S. production and a burgeoning rig count – both pointing to the ever-increasing shale drilling activities – further stymied the commodity.
Meanwhile, natural gas also turned lower following a larger-than-expected storage injection.
Recap of the Week’s Most Important Stories
1. The world’s largest oilfield services provider Schlumberger Ltd. reported first-quarter 2017 earnings of 25 cents per share (excluding charges and credits), in line with the Zacks Consensus Estimate. This may be attributed to improvement in production of the Kuwait and Egypt developments and increase in directional drilling works in North America.
However, the bottom line decreased substantially from 40 cents per share earned in the year-earlier quarter. Slowdown of drilling works in the international market resulted in the year-over-year deterioration.
While Schlumberger maintained that while the North American land market continued to recover both in terms of activity and pricing, another challenging year awaits the international markets. (Read more: Petrobras' Asset Sale to Statoil Halted by Brazilian Court .)
Price Performance
The following table shows the price movement of some the major oil and gas players over the past week and during the last 6 months.
Company | 
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Last Week | Last 6 Months |
XOM | -2.84% | -6.47% |
CVX | -3.72% | +5.12% |
COP | -5.43% | +14.59% |
OXY | -4.80% | -16.61% |
SLB | -6.38% | -7.63% |
RIG | -10.25% | +13.36% |
VLO | -0.41% | +13.39% |
TSO | -4.75% | -3.33% |
Over the course of last week, the Energy Select Sector SPDR – a popular way to track energy companies – fell by 4.74%. Consequently, investors witnessed selling in most market heavyweights. The worst performer was offshore drilling giant Transocean Ltd. (NYSE:RIG) whose stock price dived 10.25%.
Longer-term, over the last 6 months, the sector tracker is down 2.11%. Houston-based energy explorer Occidental Petroleum Corp. (NYSE:OXY) was one of the major laggards during this period, experiencing a 16.61% price decline.
What’s Next in the Energy World?
In this week, market participants will be closely tracking the regular releases i.e. the U.S. government data on oil and natural gas. Energy traders will also be focusing on the Baker Hughes data on rig count. However, the 2017 Q1 earnings remain the primary focus this week, with a number of S&P 500 members coming out with quarterly results.
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