Crude prices moved up during the past week on expectations of
an improving economy, while the recent natural gas rally took a
breather on forecasts of a break in colder temperatures.
Among the newsmakers,
) shares tanked after reporting weak fourth-quarter
Crude prices increased last week on Federal Reserve's Taper
announcement Wednesday afternoon. The central bank - working on
the premise that the U.S. economy was strong enough - stated that
it will reduce bond repurchases by a further $10 billion,
bringing its monetary stimulus to $65 billion a month from
This has fueled hopes for robust fuel and energy demand in the
worlds biggest oil consumer. The bullish momentum was propelled
by Thursday's positive reading of fourth quarter initial GDP
Sentiments were further brightened by the Energy Information
Administration (EIA) report that showed a drop in fuel (gasoline
and distillate) supplies, which outweighed an increase in oil
However, at the same time, crude prices were pressured by a
possible slowdown in China's manufacturing sector and concerns
surrounding the health of emerging markets.
As a result of these factors, by close of trade on Friday,
West Texas Intermediate (WTI) oil was slightly in the black and
settled at around $97.50 per barrel, gaining 1% for the
Natural gas fell last week, pulled down by a tepid supply data
and forecasts of a break in cold weather conditions.
The EIA's weekly inventory release showed that natural gas
stockpiles held in underground storage in the lower 48 states
fell by 230 billion cubic feet (Bcf) for the week ended Jan 24.
However, the reduction could not beat the guided range (of
228-232 Bcf drawdown) despite the cold snap that hit many cities
during the period.
Moreover, milder weather forecasts - in bulk of the country
over the next few days - are likely to limit natural gas' demand
Influenced by these factors, natural gas spot prices ended
Friday at around $4.95 per million Btu (MMBtu), down 4.5% over
Energy Week That Was:
The week's energy coverage was dominated by the following
'Big Oil' Disappoints in Q4
Among the integrated supermajors, Chevron Corp. and Royal
Dutch Shell plc posted weak fourth quarter results on falling
production and refinery margins. Chevron was the major loser, as
shares fell 4% in Friday trading.
Exxon Mobil Corp.
) - the largest U.S. oil company by market value - was the
exception, as it managed to brush past the Zacks Consensus
Estimate on the back of higher natural gas prices. However,
output and downstream profitability were down from the year-ago
Refiners Beat Estimates
Marathon Petroleum Corp.
) and Valero Energy Corp. all reported better-than-expected
fourth-quarter earnings, as increased throughput volumes and
improved operating activities more than made up for lower
Rowan Companies Initiates Dividend
The board of directors of
Rowan Companies plc
), a provider of offshore contract drilling services, initiated a
quarterly cash dividend of 10 cents per outstanding share of
common stock. The first dividend is expected to be paid in the
second quarter of 2014. Rowan's decision to initiate a quarterly
dividend reflects its steady earnings growth from its well
positioned jackup fleet and entry into the ultra-deepwater market
with four highly capable drillships.
Apache's Success Story in Egypt
) announced success at drilling ventures and new field
discoveries in Egypt's Western Desert, building on the integrated
energy company's leading position in this hydrocarbon-rich area.
Petrobras' 2013 Domestic Output Decreases
Brazil's largest integrated energy firm Petrobras announced
its full year 2013 domestic production at 2.321.0 million barrels
of oil equivalent per day (MMBOE/D), 1.5% down from 2012. The
delay in beginning the Papa-Terra oil field project, situated in
the Campos Basin, negatively affected the results. Crude volumes
(accounting for 83% of the total) were down 2.5% but natural gas
output was up by 3.8%.
Performance Chart of Some Major Companies:
The following table shows the price movement of the major oil
and gas players over the past week and during the last 6
Last 5 Day's Performance
6 month performance
Other Headline News on Energy:
QEP Resources Announces Strategic Moves
Domestic oil and gas explorer
QEP Resources Inc.
) announced a string of strategic initiatives to be undertaken by
the company to enhance the value of its business. Among the
measures, the board authorized the spin-off of its midstream
business, QEP Field Services Company, in addition to the
separation of the company's interest in the master-limited
partnership - QEP Midstream Partners L.P.
QEP Resources is arranging the necessary documents to
establish its midstream business as a standalone public company.
Additionally, the company declared a share repurchase program
worth $500 million.
Noble Corporation Hikes Dividend
Offshore drilling contractor Noble Corp. raised its quarterly
cash dividend to 37.50 cents per share ($1.50 per share
annualized), representing an increase of 50% over the previous
payout. The new dividend is payable on Feb 20, to shareholders of
record as of Feb 10, 2014.
Hess to Divest Utica Acres for $924M
Energy explorer Hess Corp. entered into an agreement with an
undisclosed buyer to divest natural gas fields in Ohio's Utica
Shale for $924 million. As part of the deal, Hess, which reported
disappointing fourth quarter earnings due to drop in production
volumes, will let go approximately 74,000 acres of dry gas
This Week's Outlook:
Apart from the usual releases - the U.S. government data on
oil and natural gas - market participants await Friday's non-farm
payroll report for January.
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