Oil & Gas Stock Roundup: Exxon, Chevron, TOTAL Report Strong Q3

It was a week where the price of oil spiked to its highest mark in nearly eight months. However, natural gas futures fell sharply.

On the news front, integrated majors ExxonMobil Corp. (NYSE:XOM) , Chevron Corp. (NYSE:CVX) and TOTAL S.A. (NYSE:TOT) came up with stronger-than-expected earnings reports, driven by higher oil prices.

Overall, it was a mixed week for the sector. While West Texas Intermediate (WTI) crude futures gained about 4% to close at $53.90 per barrel, natural gas prices slumped 5.6% to $2.752 per million Btu (MMBtu). (See the last ‘Oil & Gas Stock Roundup’ here: SLB & HAL's Q3, RIG's New Contract & More .)

The U.S. oil benchmark rallied on expectations that OPEC and other major producers will agree to expand their output-cut deal beyond March. The agreement, already renewed once, keeps 1.8 million barrels a day off the market in an attempt to clear a supply glut.

Further support came from the U.S. Energy Department's inventory release, which showed steep declines in domestic gasoline and distillate inventories on rising exports.

Upbeat third-quarter U.S. GDP data and signs of recovery in global demand growth was also bullish for oil prices.

Meanwhile, natural gas futures finished the week down despite a smaller-than-expected increase in supplies. Unfavorable weather forecasts and strength in the commodity’s production, induced the drop in prices.

Recap of the Week’s Most Important Stories

1. Energy giant ExxonMobil Corp. posted strong third-quarter 2017 results, courtesy of increased price realizations from liquids and gas and improved margins at the refinery business.

Production averaged 3.878 million barrels of oil equivalent per day (MMBOE/d), marginally higher than 3.811 MMBOE/d in the year-ago quarter. Ramp up in Australian projects supported the upside.

ExxonMobil’s downstream segment recorded profits of $1.5 billion, $303 million higher than the July-September quarter of 2016. This improvement was backed by improved margins from refining activities.

During the quarter under review, ExxonMobil generated cash flow of $8.4 billion from operations and asset sales. The energy giant returned $3.3 billion to shareholders through dividends. Capital and exploration spending increased 43% year over year to almost $6 billion. (Read more: Valero Energy Q3 Earnings & Revenues Beat, Rise Y/Y )

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.

Get The News You Want Read market moving news with a personalized feed of stocks you care about. Get The App Company	Last Week	Last 6 Months
XOM	+1.2%	+2.3%
CVX	-3.9%	+7.2%
COP	+3%	+7.3%
OXY	+0.3%	+5.6%
SLB	-1.5%	-11.7%
RIG	+1.6%	-5.8%
VLO	+0.2%	+21.3%
ANDV	+0.8%	+31.6%

Notwithstanding the bullish oil market sentiment, the Energy Select Sector SPDR – a popular way to track energy companies – failed to keep up and generated a -0.4% return last week. The worst performer was U.S. major Chevron whose stock fell by 3.9%.

Longer-term, over 6 months, the sector tracker is down a marginal 0.2%. Oilfield services behemoth Schlumberger Ltd. (NYSE:SLB) was the major laggard during this period, experiencing a 11.7% price decline.

What’s Next in the Energy World?

As usual, market participants will be closely tracking the regular releases i.e. the U.S. government statistics on oil and natural gas - one of the few solid indicators that comes out regularly. Energy traders will also be focusing on the Baker Hughes data on rig count.

However, the 2017 Q3 earnings again remain the primary focus this week, with a number of S&P 500 members coming out with quarterly results.

Wall Street’s Next Amazon (NASDAQ:AMZN)

Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.

Zacks Investment Research