Crude prices edged up on positive economic data and
geopolitical fears, while natural gas was propelled by a strong
inventory report that revealed robust demand.
Among the newsmakers, U.S. supermajor
) said that it expects first quarter profit to decline
sequentially, while European behemoth
Royal Dutch Shell Plc
) started crude oil exports from Iraq's Majnoon field.
Crude prices got a boost from the latest consumer sentiment
report that rose to a nine-month high, providing further evidence
that the U.S. economy is coming out of its winter freeze. This
has fueled hopes for robust fuel and energy demand in the world's
biggest oil consumer. The bullish momentum was further propelled
by the continued standoff in Ukraine, concerns over oil export
resumption from the Libyan coast, and a fall in OPEC crude
However, the bulls were somewhat offset by weak Chinese trade
numbers. A larger-than-expected rise in crude stockpiles added to
the negative sentiment.
As a result of these factors, by close of trade on Friday,
West Texas Intermediate (WTI) oil settled at around $103.74 per
barrel, gaining 2.6% for the week.
Natural gas rallied last week on the back of a bullish supply
data and forecasts of below-normal temperatures across certain
The EIA's weekly inventory release showed that natural gas
stockpiles held in underground storage in the lower 48 states
rose by 4 billion cubic feet (Bcf) for the week ended Apr 4, well
below the guided range (of 13-17 Bcf build).
To make things better, despite milder spring weather
predictions in bulk of the country over the next few days,
certain parts of the central and eastern U.S. are expected to
witness a comparatively cool snap. This is likely to linger
natural gas' demand for heating.
Influenced by these factors,
ended Friday at $4.64 per million Btu (MMBtu), up 4.5% over the
Energy Week That Was:
The week's energy coverage was dominated by the following
Chevron Expects Sequentially Lower Q1 Earnings
Energy major Chevron Corp. slid 2% after warning about a
sequential decline in first quarter profits due to high currency
conversion expenses and charges associated to asset impairment.
Further, Chevron's worldwide oil and gas output is likely to fall
from the previous-year period though it is expected to remain in
line with the December quarter.
In the downstream sector, the refining margin in the U.S. west
coast is expected to decrease sequentially. However, the reverse
is projected for the Gulf Coast.
Later in the week, Chevron announced a deal with
Argentina-based integrated oil firm YPF SA to invest an
additional $1.6 billion to sustain the exploration and
advancement of the shale oil and gas properties in the South
American country's Vaca Muerta formation.
Shell's Majnoon Success Prompts First Shipment
Integrated energy behemoth, Royal Dutch Shell plc reported
that it has exported yield from the Majnoon oilfield, in Iraq.
The first shipment was made as output surpassed the First
Commercial Production (FCP) target of 175,000 barrels of oil per
day (BOE/d). This is an important milestone for Shell, which has
undertaken extensive rehabilitation work at the oilfield to boost
output. Production at Majnoon oilfield currently averages 210,000
BOE/d, substantially higher than its FCP target.
Conoco Targets Double-digit Returns
At its 2014 Analyst Meeting presentation, energy biggie
) reiterated its target of delivering double-digit returns
annually to shareholders by growing production and margins by
3%-5% a year and offering a 'compelling' dividend. The company
also augmented its total resource base in its Eagle Ford acreage
by 39% to 2.5 billion barrels. The number represents original oil
in place and not recoverable barrels of proved reserves.
ConocoPhillips also intends to boost production in the Eagle Ford
play to 250,000 barrels of oil equivalent a day by 2017.
Athlon Energy Rallies on Asset Buy Deal
Shares of oil and liquids-rich natural gas explorer
Athlon Energy Inc.
) jumped 13% after it agreed to acquire certain producing and
undeveloped properties spread over 23,500 net acres in northern
Midland basin from five different sellers for a combined $873
million in cash.
The to-be-bought assets in the Texas counties Martin, Upton,
Andrews and Glasscock - adjacent to Athlon Energy's existing
fields in the region - holds an estimated 250 million
oil-equivalent barrels (MMBOE) in reserve potential and will add
4,800 BOE (67% oil) to the outfit's daily production. The
properties would also add 425 'highly prospective' horizontal
drilling locations to Athlon Energy's inventory.
Exxon to Export LNG from PNG by Mid '14
U.S. oil and gas giant
Exxon Mobil Corp.
) announced that its long delayed Papua New Guinea (PNG)
liquefied natural gas (LNG) project will start exporting LNG by
mid 2014. The PNG LNG project is on track and will commence
operations ahead of schedule and below its $19 billion budget.
The project has brought online a gas conditioning plant in PNG's
highlands. The gas is drilled at the site and a 292-kilometer
(180 miles) onshore pipeline has been placed. The first of the
two units at the LNG plant are also ready.
Performance Chart of Some Major Companies:
The following table shows the price movement of the major oil
and gas players over the past 5 days and during the last 6
Last 5 Day's Performance
6 month performance
Other Headline News on Energy:
Chesapeake Energy Prices Senior Notes
Natural gas producer
Chesapeake Energy Corp.
) priced its public offering of $3.0 billion in aggregate
principal amount of its senior notes at par. The notes will be
issued in two separate series of notes, namely $1.5 billion in
Floating Rate Senior Notes due 2019 that will bear interest at
LIBOR plus 3.25% and be reset quarterly, and $1.5 billion in
4.875% Senior Notes due 2022. Chesapeake expects the issuance and
delivery of the two series of senior notes to occur on Apr
Cheniere, Endesa in Second LNG Pact
Cheniere Energy Inc.
) announced that it has signed a second liquefied natural gas
("LNG") sale and purchase agreement (SPA) with Spanish electric
utility firm, Endesa Genercion S.A. The deal involves the sale of
about 0.75 million tons per annum (mtpa) of LNG from Cheniere's
planned Corpus Christi Liquefaction Project. The total quantity
under agreement now stands at 2.25 mtpa, including the 1.5 mtpa
LNG SPA signed earlier this month.
Energen to Sell Natural Gas Utility
U.S. energy holding company, Energen Corp. announced that it
has signed a definitive stock purchase agreement to sell its
natural gas utility business, Alabama Gas Corporation (Alagasco),
to The Laclede Group Inc. The $1.6 billion transaction comprises
$1.28 billion in cash and approximately $320 million of debt.
Energen's after-tax proceeds are estimated at $1.1 billion, after
considering accelerated intangible drilling costs. This
divestment would allow Energen to become a pure exploration and
This Week's Outlook:
Apart from the usual releases - the U.S. government data on
oil and natural gas - market participants will be tracking
several key economic reports, including those on retail sales,
industrial production and housing starts.
Want the latest recommendations from Zacks Investment
Research? Today, you can download
7 Best Stocks for the Next 30 Days
Click to get this free report >>
ATHLON ENERGY (ATHL): Free Stock Analysis
CHESAPEAKE ENGY (CHK): Free Stock Analysis
CONOCOPHILLIPS (COP): Free Stock Analysis
CHEVRON CORP (CVX): Free Stock Analysis
CHENIERE ENERGY (LNG): Free Stock Analysis
ROYAL DTCH SH-A (RDS.A): Free Stock Analysis
EXXON MOBIL CRP (XOM): Free Stock Analysis
To read this article on Zacks.com click here.