Oil & Gas Stock Roundup: Shell Boosts EV Charging Network, Petrobras Starts Up Project

It was a week where the price of oil spiked to its highest settlement since June 2015. However, natural gas futures fell sharply.

On the news front, Anglo-Dutch oil giant Royal Dutch Shell (LON:RDSa) plc RDS.A announced the expansion of its electric vehicle charging business through a partnership with Munich-based venture IONITY, while Brazil’s Petrobras (NYSE:PBR) started oil production from its Libra field off Rio de Janeiro.

Overall, it was a mixed week for the sector. While West Texas Intermediate (WTI) crude futures gained 4% to close at $58.95 per barrel, natural gas prices slumped 9.2% to $2.813 per million Btu (MMBtu). (See the last ‘Oil & Gas Stock Roundup’ here: Keystone XL's Approval, BP's Buyback & More )

The U.S. oil benchmark rallied to two-and-half year high on expectations that OPEC and other major producers will agree to expand their output-cut deal beyond March when they meet at the end of the month. 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 a decline in crude stockpiles.

The shutdown of TransCanada Corporation’s 590,000 barrel-per-day Keystone oil pipeline – one of the largest from Canada to the United States – due to a leak and subsequent cleanup operations, was also bullish for oil prices.

Meanwhile, natural gas futures logged a big decline following a smaller-than-expected decrease in supplies. Unfavorable weather forecasts and strength in the commodity’s production also fueled the downside.

Recap of the Week’s Most Important Stories

1. In a bid to bolster its electric-vehicle (EV) charging business, European oil giant Royal Dutch Shell plc is set to collaborate with EV-focused charging operator IONITY.

IONITY— one of the most significant developments in the EV infrastructure — is a joint venture (JV) formed by world’s major carmakers namely BMW Group, Daimler AG (DE:DAIGn), Ford Motor Company (NYSE:F), and Volkswagen (DE:VOWG_p) Group with Audi and Porsche. The Munich-based JV, set up only a few weeks ago, aims at designing around 400 high-power charging stations across Europe by 2020.

Per the deal, Shell is likely to launch around 80 charging networks across Europe by 2019. The charging stations will be deployed in Belgium, Britain, France, the Netherlands, Austria, the Czech Republic, Hungary, Poland, Slovakia and Slovenia. The charging points to be installed by the partnership are likely to top up the electric vehicles in around 5-8 minutes.

With this deal, Shell wants to cash in on the wide acceptance of the electric cars and thereby increase customer base and revenues. Shell believes that the deal will provide customers range of refueling choices in future and bring diversification to its asset portfolio. (Read more: Bill Barrett to Offload Uinta Assets for $110 Million )

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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.

Reflecting the week’s bullish oil market sentiment, the Energy Select Sector SPDR – a popular way to track energy companies – generated a +1.2% return last week. The best performer was Houston-based energy explorer Occidental Petroleum Corp. (NYSE:OXY) whose stock jumped 1.9%.

Longer-term, over 6 months, the sector tracker is up 0.9%. Downstream operator Valero Energy Corp. (NYSE:VLO) was the major gainer during this period, experiencing a 31.5% 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.

However, Thursday’s OPEC meeting in Vienna remain the primary focus this week, with participating nations expected to extend their output cut agreement.

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