Both crude and
remained flat last week.
Among the newsmakers, energy major
Exxon Mobil Corp.
) announced plans to spend $39.8 billion this year, while
) scored a big legal victory in the Ecuador pollution case.
Crude prices got a boost from upbeat U.S. spending and factory
data. The commodity got some more support from
better-than-expected nonfarm payroll report for February that
painted a positive picture of the economy. This has fueled hopes
for robust fuel and energy demand in the world's biggest oil
However, the bulls were offset by waning fears of an imminent
conflict in Ukraine and concerns about an economic slowdown in
China - the second largest oil consumer in the world. Crude
prices were also pressured by a surprise rise in distillate
stockpiles (including diesel and heating oil) despite the ongoing
As a result of these factors, by close of trade on Friday,
West Texas Intermediate (WTI) oil settled at around $102.6 per
barrel, more or less unmoved from the previous week.
Natural gas remained flat last week, as a bullish supply data
and geopolitical concerns over the Ukraine crisis were offset by
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 152 billion cubic feet (Bcf) for the week ended Feb 28,
above the guided range (of 135-139 Bcf drawdown). Moreover, the
decrease was higher than both last year's withdrawal of 149 Bcf
and the 5-year (2009-2013) average reduction of 105 Bcf for the
Natural gas was further boosted by the prevailing tensions in
Ukraine that may disrupt the commodity's availability to
downstream customers in Europe, sending prices soaring.
However, to even up things, milder spring weather forecasts -
over much of the country in the next few days - are likely to
limit natural gas' demand for heating.
Influenced by these factors, natural gas prices ended Friday
at $4.62 per million Btu (MMBtu), essentially flat over the
Energy Week That Was:
The week's energy coverage was dominated by the following
Exxon Set for Record Startups in '14
Energy biggie Exxon Mobil Corp. announced that it expects to
start production at 10 major projects - a company record - in
2014. This would add new capacity of about 300,000 net oil
equivalent barrels per day, paving way for growth.
However, in 2014, Exxon Mobil's capital spending is estimated
to decline to $39.8 billion from a peak of $42.5 billion in 2013.
Per the company, it will shell out an average of just under $37
billion per year from 2015 to 2017 and grow liquids volumes 4%
each year during the same period.
Chevron Wins Favorable Court Ruling in Ecuador
A New York federal judge overturned a record $9.5 billion
Ecuadorean court judgment against U.S. energy behemoth Chevron
Corp. The judge declared that the environmental damage award by
the south American country is unenforceable in the U.S. on
grounds of fraudulent activities by the Ecuadorian legal
This long, drawn-out court battle dates back to Feb 2011, when
a judge in Ecuador issued an $18 billion verdict against Chevron
for the contamination of an oil field, Lago Agrio, by one of its
affiliates, Texaco Petroleum. This charge was later reduced to
BP Plans New Unit for US Lower 48 Biz
) has proposed to form a separate business to manage its offshore
oil and gas assets - including its shale operations - in the U.S.
Lower 48. Currently, BP manages the region through its North
America Gas group based in Houston.
The new business will be managed from a new location in
Houston and not the existing Westlake campus. The unit will also
have a separate management team and different governance,
processes and systems suited to deal with the unique competitive
and operating environment onshore U.S. Lower 48.
Anadarko Provides 2014 Guidance
Independent energy explorer
Anadarko Petroleum Corp.
) offered a glimpse of its 2014 capital spending plans. The
Woodlands, Texas-based oil and gas player said that it will
increase its capital expenditures by about 8%, as it aims to
increase liquids production by 40,000 barrels per day. Anadarko
has pegged its 2014 capital budget at $8.1-8.5 billion. Of the
total, roughly 70% will go toward oil production activities.
Helmerich & Payne, YPF in 5-Year Contract
Tulsa, OK-based contract drilling services provider
Helmerich & Payne Inc.
) has inked a five year deal with Argentina's state energy
company YPF S.A. Under the drilling contract, 10 existing
FlexRigs will be supplied by Helmerich & Payne, which will
operate in the Vaca Muerta play in the Latin American country's
The first FlexRig is slated to start work in the final quarter
of fiscal 2014. The remaining fleet will be deployed in due
course. By the end of the second quarter of fiscal 2015, all the
FlexRigs are expected to be operational.
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:
McDermott Sinks on Shocking Q4
Shares of offshore oil and gas-focused engineering and
McDermott International Inc.
) fell 9% after coming out with poor quarterly results. The
company reported a loss, while revenues plunged, as McDermott
struggled with a deep-water project off Malaysia. What's more,
the service provider suspended guidance for the foreseeable
future until it pushes ahead with organizational changes.
Canadian Natural Earnings Improve, Hikes
Independent exploration and production company
Canadian Natural Resources Ltd.
) reported a jump in its fourth quarter earnings on the back of
increased production, particularly from its Pelican Lake project
in Alberta. The Calgary-based company also announced a raise in
its dividend - for the second time in three months.
Petrobras Finds Quality Oil in Santos Basin
Brazil's state-run energy giant Petrobras reported discovery
of good quality oil from two recently completed wells. These
wells are located in the pre-salt reservoirs Florim and Entorno
de Iara, in the Santos Basin in the Transfer of Rights area.
Petrobras will complete the exploration phase of these areas by
Sep 2014 and may declare the commercial viability of the region
This Week's Outlook:
Apart from the usual releases in this holiday shortened week -
the U.S. government data on oil and natural gas - market
participants will be closely tracking Thursday's monthly retail
sales data for February that will shed further light on the
economy's wellness and the need for the bond buying policy.
Energy traders will also be focusing on developments in
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 >>
ANADARKO PETROL (APC): Free Stock Analysis
BP PLC (BP): Free Stock Analysis Report
CDN NTRL RSRCS (CNQ): Free Stock Analysis
CHEVRON CORP (CVX): Free Stock Analysis
HELMERICH&PAYNE (HP): Free Stock Analysis
MCDERMOTT INTL (MDR): Free Stock Analysis
EXXON MOBIL CRP (XOM): Free Stock Analysis
To read this article on Zacks.com click here.