Energy Sector Update for 01/11/2018: DRYS,PTR,KMI

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Energy stocks were sharply higher today, with the NYSE Energy Sector Index rising almost 1.9% while shares of energy companies in the S&P 500 were up more than 2.2% as a group. West Texas Intermediate crude oil for February delivery rose to a three-year high of $64.77 per barrel earlier Thursday and was up $1.20 at $63.95 per barrel in recent New York trading while the benchmark Brent crude March contract was 59 cents higher at $69.79 per barrel. February natural gas futures were up 11 cents at $2.94 per 1 million BTU. Among energy-related ETFs, United States Oil was up almost 1.7% while United States Natural Gas advanced nearly 4.7%. Also, the Philadelphia oil-service sector index was up about 1.3%.

In industry news:

The Energy Information Administration said natural gas inventories fell 359 billion cubic feet during the seven days ended Jan. 5 to 2,767 billion cubic feet, the largest weekly decline in at least five years. It also was the eighth weekly drawdown of the current heating season and more than doubled the 151 cubic foot draw in the year-ago period.

Also, Goldman Sachs Equity Research said it sees potential in the coming months for the energy sector to "grind higher as long as data points are favorable." The outlook was released following the research group's two-day energy conference in Miami, with Goldman Sachs saying shale producers at the conference "spoke more proactively about debt paydown, corporate returns and returning cash to shareholders." Over all, the firm said it "came away from the conference with greater confidence that energy incremental corporate returns and free-cash-flow yields will improve versus the broader market in 2018 and that long-term oil price expectations are unlikely to fall."

Among energy stocks moving on news:

DryShips ( DRYS ) shares rose Thursday as the shipping firm said its fourth very large gas carrier began a 10-year, fixed rate time charter with an unidentified oil major trading company, generating a total gross backlog associated with this time charter of up to $103.8 million.

In other sector news:

+ PetroChina ( PTR ) advanced Thursday after analysts at Citigroup raised their stock rating for the oil and natural gas producer to Buy from Sell.

- Kinder Morgan ( KMI ) declined Thursday after Well Fargo analyst Michael Blum cut his investment recommendation for the natural gas pipeline company to Market Perform from Outperform and also lowered his price target for its stock by $3 to $21 a share, citing "persistently high" leverage and headline risk associated with the TransMountain pipeline expansion project as negative factors.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing , Energy
Referenced Symbols: DRYS , PTR , KMI

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