Oil & Gas Stock Roundup: Exxon's Restructuring, Shell's Cash Dividend Resumption & More

It was a week where the price of oil ended slightly lower. However, natural gas futures rose sharply.

On the news front, the world’s largest publicly traded oil company ExxonMobil Corp. (NYSE:XOM) has decided to combine its refining and marketing units, while Anglo-Dutch oil giant Royal Dutch Shell (LON:RDSa) plc RDS.A restored its full-cash dividend after more than two years.

Overall, it was a mixed week for the sector. While West Texas Intermediate (WTI) crude futures lost about 1% to close at $58.36 per barrel, natural gas prices jumped 5% to $3.061 per million Btu (MMBtu). (See the last ‘Oil & Gas Stock Roundup’ here: Shell Boosts EV Charging Network, Petrobras Starts Up Project )

Notwithstanding OPEC and other major producers’ agreement to expand their output-cut deal beyond March – for another nine months to the end of 2018 – the U.S. oil benchmark fell from previous week’s two-and-half year high. The major culprit was the steady trend of rising domestic oil production that continues to be the biggest headwind for the market. In fact, U.S. output rose by 13,000 barrels per day last week to 9.7 million barrels per day – the most since the EIA started maintaining weekly data in 1983.

Meanwhile, natural gas futures logged a big increase despite a smaller-than-expected decrease in supplies as investors chose to bet on the return of colder weather (translating into strong heating gas demand) over the next few weeks.

Recap of the Week’s Most Important Stories

1. Energy giant ExxonMobil Corporation plans to merge its two separate business units into ExxonMobil Fuels & Lubricants Company.

The merger is expected in first-quarter 2018. The merged company will be headed by the current president of ExxonMobil Fuels, Lubricants & Specialties Marketing Company — Bryan Milton — effective Jan 1, 2018. Milton has been elected as the president by the Zacks Rank #2 (Buy) company’s board of directors. You can see Carrizo Divests Non-Core Properties, Stock Declines )

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	Last Week	Last 6 Months
XOM	+2.9%	Get The News You Want Read market moving news with a personalized feed of stocks you care about. Get The App +5.1%
CVX	+3.1%	+17.2%
COP	+3%	+14.3%
OXY	+2.9%	Get The News You Want Read market moving news with a personalized feed of stocks you care about. Get The App +15.8%
SLB	+4.2%	-7.5%
RIG	+5.9%	+14.7%
VLO	+2.2%	+34.6%
ANDV	+0.5%	+28.4%

Shrugging off the week’s bearish oil market sentiment, the Energy Select Sector SPDR – a popular way to track energy companies – generated a +2.9% return last week. The best performer was offshore drilling rig operator Transocean Ltd. (NYSE:RIG) whose stock jumped 5.9%.

Longer-term, over 6 months, the sector tracker is up 5.8%. Downstream operator Valero Energy Corp. (NYSE:VLO) was the major gainer during this period, experiencing a 34.6% price appreciation.

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.

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Zacks Investment Research

Written By: Zacks Investment Research