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Your Weekly Energy Snapshot: July 10–14, 2017

Crude oil futures

On July 7–14, 2017, US crude oil (USO) (DBO) August futures rose 5.2%. In all of the last five trading sessions, oil prices settled higher. On July 14, 2017, US crude oil August futures settled at $46.54 per barrel—just below the $47 mark.

Your Weekly Energy Snapshot: July 10–14, 2017

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OPEC and non-OPEC members’ upcoming meeting on July 24, 2017, could be the reason behind higher oil prices despite the rise in global crude oil production. In the meeting, stronger action is expected to support oil prices. In the week ending July 14, 2017, the US oil rig count was 765—two more than the previous week. Rising oil rigs could pose a threat to oil bulls.

In the week ending July 7, 2017, US crude oil inventories fell by 7.6 MMbbls (million barrels)—reported on July 12, 2017. Last week, a contraction in the crude oil inventories spread, the fall in the US dollar (UUP), and an uptick in gasoline demand could have boosted oil prices.

In the week ending July 14, 2017, US equity markets (SPY) (DIA) and gold (DGL) rose—viewed as bullishness across different asset classes.

Natural gas futures

In the week ending July 14, 2017, natural gas (UNG) (GASL) August futures rose 4.1%. Earlier in the week, natural gas prices rose because of a warmer weather forecast. The weather could also be hot and humid this week. On July 14, 2017, natural gas August futures settled at $2.98 per MMBtu (million British thermal units). However, inventory data coming in below the market’s expectation wasn’t able to boost natural gas prices last week.

The natural gas rig count fell by two to 187 last week. However, the rise in the oil rig count could threaten natural gas prices.

Global equity markets

In the week ending July 14, 2017, the S&P 500 Index (SPY) rose 1%. During the same period, the Dow Jones Industrial Average (DIA) and the S&P Mid-Cap 400 Index (IVOO) rose 1%.

On July 7–14, 2017, the CAC 40 Index (EWQ) rose 1.8%. The FTSE 100 Index (EWU) rose 0.4%—it was the underperformer among major global equity indexes during this period.

The rise in oil prices could have impacted the energy constituents of these equity indexes positively. US crude oil August futures rose 5.2% in the week ending July 14, 2017.

Your Weekly Energy Snapshot: July 10–14, 2017

Select Sector SPDR ETFs

The Energy Select Sector SPDR ETF (XLE) rose 2.2% in the week ending July 14, 2017. It was the second-largest gainer among the sector-based SPDR ETFs after the Technology Select Sector SPDR ETF (XLK). The Financial Select Sector SPDR ETF (XLF) was the only loser among the SPDR ETFs last week.

Energy subsector

Among the energy subsector ETFs, the Alerian MLP ETF (AMLP) was the underperformer—it rose 1% on July 7–14, 2017. Other major energy subsector ETFs such as the VanEck Vectors Oil Services ETF (OIH) and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) rose 5.8% and 4.1% during this period. We discussed XLE’s performance in the previous paragraph. Apart from oil’s movement, the sentiment in equity markets is also responsible for gains in these ETFs.

Energy stocks

Now, we’ll evaluate the performance of energy stocks taken from energy ETFs such as AMLP, OIH, XLE, and XOP. The list also has a few foreign-based integrated energy companies that are listed in the US.

Your Weekly Energy Snapshot: July 10–14, 2017

For oilfield services and equipment stock, Tidewater (TDW) rose the most among the energy stocks. On July 13, 2017, Tidewater announced that the United States Bankruptcy Court for the District of Delaware gave a green signal to implement its plan to restructure the company’s balance sheet. On the same day, the stock rose 7.4%.

Other oilfield services and equipment stocks such as Weatherford International (WFT), Noble (NE), and Superior Energy Services (SPN) were second, third, and fifth on the list of the top gainers last week. In fact, OIH was the outperformer among the energy subsector ETFs.

On July 7–14, 2017, CVR Refining (CVRR) fell the most among the energy sector stocks. CVR Refining will release its financial results for 2Q17 on July 27, 2017. The company announced the date on July 13, 2017. Analysts expect CVR Refining’s earnings to be $0.42 per share for 2Q17.

Other downstream stocks, Delek US Holdings (DK), Western Refining (WNR), and Phillips 66 (PSX) were the second, fourth, and fifth-largest losers among our list of energy stocks. On July 12, 2017, Phillips 66 announced a quarterly dividend of $0.7 per share for its common stock.

In the week ending July 14, 2017, the VanEck Vectors Oil Refiners ETF (CRAK) rose 2.5%. CRAK tracks an index of global downstream energy companies.

Key events this week

The following table shows important dates for energy investors. These events could impact their investment in the energy sector.

Your Weekly Energy Snapshot: July 10–14, 2017

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