Energy Sector Update for 05/07/2018: GNRT,APD,RDS.A,RDS.B,NOG

Top Energy Stocks

XOM +1.14%

CVX -0.40%

COP +0.11%

SLB +0.92%

OXY -0.25%

Energy stocks were ending higher on Monday, giving up much larger gains earlier in the session. At last look, the NYSE Energy Sector Index was rising more than 0.3% while shares of energy companies in the S&P 500 were up almost 0.3% as a group. West Texas Intermediate crude oil for June delivery settled $1.01 higher at $70.73 per barrel in New York while the global benchmark Brent crude July contract rose 41 cents to $75.28 per barrel. June natural gas futures rose 3 cents to $2.74 per 1 million BTU. Among energy-related ETFs, United States Oil was up just over 1.1% while United States Natural Gas was climbing more than 1.0%. The Philadelphia oil-service sector index also was over 2.8% higher today.

In industry news:

U.S. crude oil futures rose Monday, topping $70 per barrel for the first time since November 2014, amid rising expectations the United States will impose new sanctions on Iranian oil production. U.S. President Donald Trump has until May 12 to re-certify the international accord adopted in 2015 that suspended Iran's nuclear program and he increasingly is seen walking away from the deal and again imposing sanctions on the country. Iran produced almost 5% of the world's crude oil output in 2016, averaging just under 4 million barrels per day, according to the U.S. Energy Information Administration. It keeps roughly one-third of its oil for domestic uses and exports the remainder, mostly to Asia.

Among energy stocks moving on news:

(-) Gener8 Maritime ( GNRT ) was about 1% lower shortly before Monday's closing bell, erasing almost all of a 13% opening decline that followed the company saying its FY17 financial statements should no longer be relied on. The petroleum shipper said it was in compliance with all of its financial covenants that were in effect at the end of 2017 but it cautioned it likely won't be in compliance with a covenant setting a maximum interest expense ratio at the end of its most recent quarter on March 31. The company also expects it will need to re-classify about $1 billion of its outstanding debt owed under its senior secured credit facilities as current rather than non-current. It blamed recent weakness in the tanker industry that has sent charter rates falling and interest costs rising.

In other sector news

(+) Northern Oil & Gas ( NOG ) was surging on Monday, at one point rising almost 14% higher, after reporting better-than-expected Q1 financial results and raising its FY18 production forecast. Excluding one-time items, the oil and natural gas company earned $0.17, improving on $0.00 per share during the same quarter last year and beating the Capital IQ consensus by $0.05 per share. Revenue rose to $78.8 million during the three months ended March 31 from $48.8 million during the year-ago period but lagged the $79.4 million consensus. Q1 production climbed 33% year-over-year to around 1.6 million barrels of oil equivalent and the company increased its outlook for the full year by 8 percentage points to a new range expecting 26% to 30% growth over FY17 levels.

(+) Air Products ( APD ) was trading about 1% higher, slowly building on a small gain soon after the opening bell that followed the chemicals company extending its reach into petroleum-based production after Monday closing on its purchase of coal-gasification technology from a Royal Dutch Shell (RDS.A,RDS.B) subsidiary and immediately formed a strategic allience to turn residue from Shell's refineries into synthesis gas. The acquisition included Shell's patents for coal and other solids gasification and shares its patent portfolio for residue and biomass gasification with Air Products. Financial terms of the transaction were not disclosed.

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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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