Personal Finance
NR

Oil and Gas Stock Roundup: Oil Stocks Start 2017 on a High Note (NE, WFT, OSG, ESV, NR)

NE Price Chart
NE Price Chart

NE Price data by YCharts

So what

Offshore driller Ensco was the only company on that list that had any notable individual catalysts helping fuel its rise this week. The first was the release of the final results for its senior notes exchange offer, which saw the company accept $650 million in principal value of legacy notes. In addition to that, Ensco's management team presented at an industry conference this week and detailed their outlook for the offshore market. Not only do they expect spending to bottom out this year, but they see several catalysts for long-term growth. That rather optimistic outlook drove several offshore drillers higher this week, including Noble.

Aside from that, the continued rally in crude oil was the primary catalyst behind most of this week's biggest movers. In Weatherford's case, investors are betting that rising oil prices will finally drive a turnaround in the oil-field services company's financial results, which have been under pressure for years due to problems with its balance sheet, issues with its accounting practices, and the oil market downturn. Likewise, investors are hoping for a similar turnaround in demand for drilling fluids supplied by Newpark Resources, which could reverse its two-year revenue slide.

Finally, investors sent Overseas Shipping's stock up this week on the hopes that an improving oil market will drive demand for tankers. The company, which recently spun off its international arm, is now entirely focused on the U.S. Jones Act market, which should grow as more American refineries take advantage of domestic production from shale plays. Investors see the OPEC-induced improvement in oil prices driving a recovery in shale production, which could fuel incremental upside at Overseas Shipping as refineries accept more oil from these sources.

Now what

The oil market is entering 2017 on an optimistic note as OPEC starts shutting down some of its pumps. Those efforts should begin to drain the market's oversupply, which will allow other producers to start working on bringing future supplies online. That should flow down to an increased workload for service companies, which could see an end to their recent revenue slides.

10 stocks we like better than Weatherford International

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Weatherford International wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of January 4, 2017

Matt DiLallo has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

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


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

In This Story

NR NE OSG

Other Topics

Stocks

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More