Analyzing Schlumberger’s Stock Price on April 13
Schlumberger’s stock price with respect to industry
In the past year, Schlumberger (SLB) stock was up 1% until April 13, 2017. In the past year, SLB has underperformed the VanEck Vectors Oil Services ETF (OIH), which has generated 8% returns. OIH is an ETF tracking an index of 25 oilfield equipment and services (or OFS) companies.
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The Energy Select Sector SPDR ETF (XLE), the broader energy industry ETF, has also produced 8% returns in the past year. Schlumberger has also underperformed the SPDR S&P 500 ETF (SPY), which has produced 12% returns during the same period.
The Dow Jones Industrial Average (DJIA-INDEX) increased 14% in the past year. The energy sector makes up 6.3% of the DJIA-INDEX.
Crude oil price and rigs
In the past year, West Texas Intermediate (or WTI) crude oil prices recovered 27%. The hike in crude oil prices partially explains OIH’s rise. The rise in crude oil prices also prompted a US rig count revival, which increased 93% during the past year. Please read the latest on crude oil prices in Market Realist’s Will US Crude Oil Production Offset Major Oil Producers’ Deal?
Schlumberger partners with YPF
On April 14, 2017, Schlumberger made an agreement with YPF S.A. (YPF) related to a shale oil project to be developed in Bandurria Sur Block in Neuquén, Argentina. YPF is an Argentina-based integrated energy player. SLB has committed to invest $390 million in phases in the project.
What can drive SLB’s returns in 2017?
- Exploration spending for the North American upstream producers can increase 30%.
- Higher US upstream activity can improve oilfield service companies’ prices and margins.
- On March 24, Schlumberger and Weatherford International (WFT) announced that they would form a joint venture (or JV) named “OneStimSM.” Read more on this and the latest updates on SLB in Market Realist’s What to Expect from Schlumberger Stock after JV with Weatherford.
Latest on the oilfield services industry
You can read how the large cap OFS companies like Halliburton (HAL) and National Oilwell Varco (NOV) have been faring recently in Market Realist’s Energy’s Price Recovery Prompts an Oilfield Services Revival.
You can read more about Halliburton in Halliburton’s Updated 1Q17 Guidance: What the Market Suggests.
In this series, we’ll look at Schlumberger’s (SLB) correlation with crude oil, investors’ short interest in SLB, and analysts’ recommendations. We’ll start with SLB’s implied volatility next.