Coal Prices Fell on Subdued Demand
For the week ended November 20, 2015, PRB (Powder River Basin) spot coal prices came in at $9.55 per ton, down from $9.67 per ton at the end of the previous week.
According to the EIA’s (U.S. Energy Information Administration) estimates, US coal shipments remained at 16.5 million tons during the week ended November 6, 2015.
Electricity generation in the United States increased marginally to 69.3 million MWh (megawatt-hours) in the week ended November 13, 2015.
US electricity generation rose 1.1% to 69.3 million MWh (megawatt-hours) in November 13, 2015, over the previous week’s 68.6 million MWh.
Crude oil prices remained almost steady during the week ended November 20, 2015.
Henry Hub benchmark natural gas prices saw an uptick during the week ended November 20, 2015.
For the week ended November 13, 2015, natural gas inventory came in at 4,000 Bcf (billion cubic feet) compared to 3,985 Bcf a week earlier.
Upstream is a capital-intensive industry. Low cash flow increases a company’s chances of being caught in a vicious cycle of debt-raising and refinancing.
The average cost of production per BOE for was $14.09 for the largest E&P companies at the end of 2014, representing a decrease of 3% compared to 2013.
After the FOMC’s meeting on October 28, the stock of upstream companies fell by 8% as of November 23.
As of November 23, 2015, the 100-day moving averages of many upstream companies’ stocks showed strong resistance.
Most upstream companies hedge their production to avoid the effects of changes in prices of crude oil and natural gas.
Reports have claimed that the Arctic Circle has large reserves of oil and gas, and Russia borders about 60% of that area geographically.
As John McCain has stated, “Russia is a gas station masquerading as a country.” Today, Turkey shooting down the Russian fighter jet has set the equation.
Of seven analysts covering Western Refining, one rated it a “buy,” one maintained it as “overweight,” and the other five analysts rated it as “neutral.”
Western Refining’s 3Q15 aggregate institutional investor filings show that the majority of asset managers have been more bullish about WNR than about peers.
After its 3Q15 results, the consensus 12-month target price of Western Refining’s stock was $50.13, implying a return of ~3.6% over the next 12 months.
Western Refining outperformed both the S&P 500 Energy and its peer group in 3Q15. WNR gained ~23% YTD in 3Q15.
During 2Q15, Western Refining’s aggregate share was $67.6 million, compared to $64.6 million in 1Q15, showing new additions of 4.67% in the company’s stock.
Due to falling crude oil prices since 1Q15, Western Refining’s revenues declined by ~36% YoY to $1.48 billion in 3Q15. Its net income shrunk by ~17% YoY.