Crude prices edged back over $100 during the past week on
expectations of an improving demand outlook and positive trade
data out of China, while natural gas moved higher amid bullish
supply data and concerns over a key pipeline explosion.
Among the newsmakers, oil and gas producer
Occidental Petroleum Corp.
) announced plans to spin off its California business, creating
two independent companies.
Crude prices edged up a little last week on a positive demand
outlook for heating oil amid below-normal temperatures that have
prevailed for most part of the winter. The commodity got some
more support from Janet Yellen's reassuring Fed commentary and
strong January trade data from China.
However, at the same time, dismal consumer and labor reports
weighed on crude prices. Sentiments were further dampened by the
soft Energy Information Administration (EIA) report that showed a
higher-than-expected increase in oil inventories, which remains
in the upper half of the average for this time of the year.
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 just over $100.00 per barrel, gaining a meager 0.3%
for the week.
Natural gas rallied last week on the back of a large decrease
in supplies, forecasts of continued freezing cold weather
conditions, and reports of an explosion in a major pipeline.
The EIA's weekly inventory release showed that natural gas
stockpiles held in underground storage in the lower 48 states
fell by 237 billion cubic feet (Bcf) for the week ended Feb 7,
higher than the guided range (of 228-232 Bcf drawdown). Moreover,
the decrease was considerably higher than both last year's
withdrawal of 152 Bcf and the 5-year (2009-2013) average
reduction of 162 Bcf for the reported week.
Chilly weather forecasts - in the eastern U.S. over the next
few days - are likely to further spur natural gas' demand for
heating, while an explosion in an important pipeline in southern
Kentucky could send prices soaring again.
Influenced by these factors, natural gas prices ended Friday
at around $5.21 per million Btu (MMBtu), up 9.0% over the
Energy Week That Was:
The week's energy coverage was dominated by the following
Occidental to Break in Two
Los Angeles-based energy explorer Occidental Petroleum Corp.
announced plans to separate its oil and gas assets in California
into a separate company, apart from shifting its headquarters to
Houston. The spin-off will see the formation of a new entity that
will have around 8,000 employees and will be the state's biggest
natural gas producer. Endorsing the move as a bid by Occidental
to drive up the value of the company, shares closed up 3.8% at
$95.76 on the NYSE trade on Friday.
Exxon Mobil Produces First Gas from Damar
Exxon Mobil Corp.
) produced first gas from its Damar field, off the east coast of
Peninsular Malaysia. With a forecasted peak capacity of 200
million cubic feet per day, the project is expected to help
Malaysia meet its rising natural gas demand. In particular, the
startup of Damar - in which Exxon Mobil holds a 50% operated
interest - is another important step towards the company's global
production growth in the coming years.
Q4 Earnings Crash at Apache, to Exit Argentina
U.S. energy firm
) reported weak fourth quarter results, as asset sales reduced
production. The production of oil and natural gas averaged
687,911 oil-equivalent barrels per day (55% liquids), down
approximately 14.0% year over year. In another announcement,
Apache said that it will sell its operations in Argentina to
state energy company YPF S.A. for $800 million in cash. The
decision is in accordance with the Houston-based oil and gas
explorer's plan to exit business that do not fit into the
company's long-term growth plan, apart from paring borrowings and
Phillips 66 to Divest Assets
) announced that it would divest its products pipeline system and
two storage spheres for $700 million to its spun-off partnership
Phillips 66 Partners L.P. The to-be-sold properties include
Phillip 66's Gold Line System - which consists of a 681-mile
refined products pipeline that runs from its Borger, Texas
refinery to Cahokia, Illinois - and two refinery-grade propylene
storage spheres. The transaction is expected to be completed by
ION Geophysical Shares Soar on Strong Results
Shares of energy technology provider
ION Geophysical Corp.
) popped more than 29% on Thursday following a better than
expected earnings announcement. The company, which went through a
tough period in 2013 thanks to cost overruns, easily beat profit
and revenue estimates, as clients worldwide saw value in its
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:
Pioneer Earnings Miss Estimates by a Whisker
Oil and gas finder
Pioneer Natural Resources Co.
) missed earnings estimates by a whisker, as expenses rose
sharply and offset the strong revenue growth. However, the
numbers improved from last year, backed by higher price
realization. On an encouraging note, total production in the
reported quarter averaged approximately 164.2 thousand barrels of
oil equivalent per day, up 8.3% year over year. The growth was
attributable to robust yield in core growth assets - Spraberry
field, Wolfcamp Shale and Eagle Ford Shale.
Encana Beats on Q4 Earnings, Lags Revs
Calgary, Alberta-based exploration and production company
) reported better-than-expected fourth quarter earnings. A
significant rise in liquid output from resource plays in USA and
Canadian divisions aided the results. However, reduced natural
gas realization made a dent in Encana's revenues.
Kodiak Shares Up 5% on Prelim Update
Independent energy company Kodiak Oil & Gas Corp. reported
good numbers in its preliminary 2013 operational and financial
update. Kodiak shares went up post announcement and settled at
$11.35 on Feb 11, up 5.1% from the previous close. As of Dec 31,
2013, Kodiak's total estimated proved reserves jumped 77% year
over year to about 167.3 million barrels of oil equivalent (83%
oil, 46% proved developed). Additionally, average daily sales
volumes for 2013 went up 103.0% year over year to 29,200 barrels
of oil equivalent per day.
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 await housing market numbers that will shed further
light on how well the economy is doing.
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