Oil & Gas Stock Roundup: Shell, EOG, Concho Report Strong Q3

It was a week where the price of oil spiked to its highest mark in more than two years and natural gas futures rose marginally.

On the news front, integrated major Royal Dutch Shell (LON:RDSa) plc RDS.A , as well as Permian-focused upstream oil and gas explorers – EOG Resources Inc. (NYSE:EOG) and Concho Resources Inc. (NYSE:CXO) – came up with stronger-than-expected earnings reports, driven by higher commodity prices.

Overall, it was a good week for the sector. West Texas Intermediate (WTI) crude futures gained about 3.2% to close at $55.64 per barrel, while natural gas prices edged up 0.7% to $2.984 per million Btu (MMBtu). (See the last ‘Oil & Gas Stock Roundup’ here: Exxon (NYSE:XOM), Chevron (NYSE:CVX), TOTAL Report Strong Q3 .)

The U.S. oil benchmark rallied to its highest settlement since July 2015 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, apart from a bigger-than-expected fall in domestic crude supplies.

Upbeat U.S. economic data sets and signs of recovery in global demand growth was also bullish for oil prices.

Meanwhile, natural gas futures logged a small gain following an in-line increase in supplies. Favorable weather forecasts and strength in the commodity’s demand provided further upside.

Recap of the Week’s Most Important Stories

1. Europe’s largest oil company Royal Dutch Shell reported strong third-quarter results on all round contribution from all its segments. In particular, rebounding commodity prices and cost cuts helped the Zacks Rank #2 (Buy) company come out with better-than-expected numbers. You can see PetroChina Q3 Earnings Jump on Oil Rebound, Cost Cuts )

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	-0.4%	+2.1%
Get The News You Want Read market moving news with a personalized feed of stocks you care about. Get The App CVX	-2.9%	+10.6%
COP	+2.9%	+14.8%
OXY	+5.6%	+13.9%
SLB	+0.3%	-6.8%
RIG	+7%	+0.6%
VLO	+6%	+24.7%
ANDV	+5.2%	+38%

Reflecting the bullish oil market sentiment, the Energy Select Sector SPDR – a popular way to track energy companies – generated a +2.2% return last week. The best performer was Houston-based energy explorer Occidental Petroleum Corp. (NYSE:OXY) whose stock rose by 5.6%.

Longer-term, over 6 months, the sector tracker is up 4.4%. Downstream operator Andeavor (NYSE:ANDV) was the major gainer during this period, experiencing a 38% 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.

The 2017 Q3 earnings will again garner some attention this week, with a few energy companies coming out with quarterly results.

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Written By: Zacks Investment Research