Energy Sector Update for 03/06/2018: CVX,BTE,BTE.TO,CDEV

Top Energy Stocks

XOM +0.12%

CVX +0.91%

COP +0.13%

SLB +0.92%

OXY +0.11%

Energy stocks have turned mixed Tuesday afternoon, with the NYSE Energy Sector Index rising about 0.3% while shares of energy companies in the S&P 500 also were down less than 0.1% as a group. Crude oil for April delivery was slipping 10 cents to $62.47 per barrel in New York, reversing prior gains, while the benchmark Brent crude April contract still was advancing 4 cents to $65.58 per barrel. April gas futures were 4 cents higher at $2.75 per 1 million BTU. Among energy-related ETFs, United States Oil was falling 0.4% in recent trade while United States Natural Gas was up more than 1.6%. The Philadelphia oil-service sector index was down over 0.3%.

In industry news:

Oil prices Tuesday were mixed, giving back early gains that followed the International Energy Agency Monday saying it expects global demand for crude oil to continue over the next five years, with much of that demand to be met by producers in the United States, Canada, Brazil and other non-OPEC nations. The IEA report also found crude prices were supportd by OPEC production limits as well as by petrochemicals and Asia despite a slowdown in Chinese demand in response to new environmental measures to curb air pollution. US producers are set to cover 80% of 6.4 million barrels per day of global demand growth through 2023, the agency said. Traders later Tuesday will be looking to the American Petroleum Institute's weekly inventory report for the seven days ended March 2. The API report is due out at 4:30 p.m. ET.

Among energy stocks moving on news:

+ Chevron ( CVX ) was higher Tuesday, easing slightly from an early 2% advance to a session high of $115.51 a share, after its chief executive said the energy major is looking to grow its free cash flow during 2018 and in following years. Shares drifted slightly higher in Tuesday's pre-market. "Even with no commodity price appreciation, we expect to deliver stronger upstream cash margins and production growth," CEO Michael Wirth Monday told analysts and shareholders during an investor conference. "This is a powerful combination." Wirth also said the company will maintain its capital discipline, pointing to its $18 billion investment program this year along with yearly investments in a range of $18 billion to $20 billion through 2020. Also during the conference, Chevron executive vice president for upstream operations, Jay Johnson, reviewed his division's recent opportunities, including its Tengiz project in Kazakhstan, which is slated to begin first production in 2022. "We're advancing development of our unconventional resources, particularly in the US Permian Basin, where we have a leading position," Johnson said. "We're seeing reserves grow, costs shrink, efficiencies expand and production rise."

In other sector news

- Baytex Energy (BTE,BTE.TO) rose over 10% on Tuesday, touching a session high of $3.02 a share, after the Canadian oil and natural gas producer reported a surprise Q4 profit and revenue also topping expert opinion. Excluding one-time items, the company earned C$0.32, or about $0.25, per share, reversing a C$1.66 per share net loss durinh the same quarter last year and also beating the Capital IQ consensus looking for a C$0.12 per share net loss. Total revenue rose to C$302.2 million from C$233.1 million last year, also exceeding the single-analyst call expecting C$277 million in revenue.

- Centennial Resource Development ( CDEV ) declined Tuesday, sinking over 4% to a session low of $19.23 a share, after funds affiliated with Riverstone VI Centennial QB Holdings LP together with other institutional investors filed to sell 25 million of the oil and natural gas company's shares through a secondary offering. Some of the selling shareholders also issued 30-day options to the underwriters to buy up to 3.75 million more shares to cover potential overallotments.

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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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