Energy stocks pared some of their earlier declines, with the NYSE Energy Sector Index falling 0.4% while shares of energy companies in the S&P 500 were down 0.2% as a group. Crude oil for February delivery settled 58 cents lower at $63.37 per barrel in New York while the benchmark Brent crude March contract was down 73 cents at $68.58 per barrel. February natural gas futures slipped 1 cent to $3.19 per 1 million BTU. Among energy-related ETFs, United States Oil was down 0.4% while United States Natural Gas was down 1.3%. Also, the Philadephia oil-service sector index was nearly 1.1% higher today.
In industry news:
The number of oil and natural gas rigs in use throughout North America grew again during the seven days ended Jan. 19, rising by 46 rigs to a total of 1,261 rigs. The bulk of the additional rigs came online in Canada, according to oilfield service conglomerate BakerHughes ( BHGE ), with producers north of the border adding 23 and 26 oil and gas rigs, respectively, this week for a total of 325 rigs in use in Canada. Those increases offset a small decline in U.S. activity this week, with the number of oil rigs slipping for the second time in three weeks. U.S. companies operated 747 oil rigs and 189 gas rigs, down five and up two, respectively, over last week. Overall, the number of rigs in use throughout the United States was down by three rigs week over week at 936, compared with 694 U.S. rigs during the same week last year.
Navios Maritime Acquisition ( NNA ), downgrade to Neutral from Overweight at JP Morgan.
Among energy stocks moving on news today:
American depository shares of Petroleo Brasileiro ( PBR ) was narrowly lower Friday afternoon, pausing from its 18% advance since the new of the year, following reports the Brazilian state-owned oil company also known as Petrobras owes that country's government billions of dollars in offshore exploration rights and is not expected to repay that debt any time during 2018, a Brazilian cabinet minister told Reuters. The government's 2018 budget does not include any revenue from the rights granted to Petrobras, Planning Minister Dyogo Oliveira told the news service yesterday. His remarks also suggest the dispute could drag on indefinitely despite the start this week of a government commission made of representatives from several ministries in a bid to speed up talks.
Petrobras ADRs have rallied 18% since the beginning of the year and were little changed at $12.15 at 2:38 pm ET in New York on Friday.
In other sector news:
+ Golar LNG Partners ( GMLP ) was edging higher today after signing a 15-year contract for a floating storage and regasification unit in the Atlantic Basin beginning during the final three months of 2018. The vessel is projected to generate between $18 mln to $22 mln in operating income each year before depreciation and amortization although the charter rate will vary based on demand for regasification throughput.
- Schlumberger ( SLB ) fell Friday despite today reporting a Q4 profit of $0.48 per share, beating the Capital IQ consensus by $0.03 per share. Revenue grew 15% to $8.18 bln, also topping the $8.12 bln Street view.
- National Oilwell Varco (NOV) declined after the oilfield-services company today said it will take a pre-tax Q4 restructuring charge of between $120 mln to $140 mln to account for the combination of its rig systems and rig-aftermarket reporting segments. It also expects its adjusted Q4 results will match or possibly exceed prior forecasts, excluding the charge.
- Penn Virginia (PVAC) was narrowly lower after the oil and natural gas producer said executive board chairman Harry Quarls will retire on Feb. 28. Following his departure, the company temporarily will trim the number of board seats by one to six members, with directors Darin Holderness and David Greenberg becoming non-executive co-chairmen during the search for a permanent chairman with industry expertise.