Energy Sector Update for 01/02/2018: APLP,AROC,WFT,SLB,JONE
Top Energy Stocks
Energy stocks were ending sharply higher today, with the NYSE Energy Sector Index rising over 1.8% while shares of energy companies in the S&P 500 were up more than 1.5% as a group. Crude oil for February delivery settled 5 cents lower at $60.37 per barrel while February natural gas futures rose 10 cents to $3.05 per 1 million BTU. Among energy-related ETFs, United States Oil climbed 0.2% while United States Natural Gas also was 0.2% higher. The Philadephia oil-service sector index declined 0.25%.
In industry news:
Crude oil prices edged lower Tuesday but stayed above $60 per barrel amid more unrest in the Middle East, including political demonstrations in Iran continuing for a sixth day. Elsewhere, the Forties pipeline system in the North Sea was again operating after it was shut in last month for repairs. U.S. crude oil inventories have fallen during each of the past four weeks, suggesting robust demand and slowing production could soon re-balance global oil prices, although the Energy Information Administration is predicting U.S. production will increase enough this year for the United States to bypass the Russian Federation as the world's top producer by the end of 2018.
Among energy stocks moving on news:
Archrock Partners LP ( APLP ) was sharply higher in late Tuesday trading, climbing almost 16%, after Archrock ( AROC ) today offered to buy the remaining public stake in the pipeline and infrastructure company for $607 mln in stock. Under terms of the merger agreement, each Archrock Partners common unit will be converted into 1.400 Archrock common shares, representing a 23.4 percent premium to the Archrock Partners closing price last Friday. Archrock is expecting the deal will immediately boost its per-sharek earnings while also increasing the cash available for shareholder distributions, with management planning to recommend the Archrock board increase its quarterly dividend by 10% over current levels.
In other sector news:
+ Jones Energy ( JONE ) was higher in late Tuesday trading, reversing a mid-morning decline and overcoming a downgrade today to Hold from Buy at SunTrust, which also reduced its price target by $1.50 - or 60% - to $1 a share.
- Weatherford International ( WFT ) tumbled Tuesday after late last week scrapping its participation in the OneStim joint venture and instead selling its 30% stake in the pressure-pumping joint venture to majority partner Schlumberger ( SLB ) for $430 mln in cash. Weatherford will use sale proceeds to reduce outstanding debt.
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