What’s the Outlook for Oil and Energy in 2017?
Despite skepticism about the efficacy of OPEC’s agreement, we think that oil (USO) (UCO) is set to rise in the medium term.
OPEC’s output cuts helped buoy oil prices in a big way. Oil prices enjoyed a steady increase in December. It’s expected to breach $60 per barrel in 1H17.
As in October 2016, no drilling permits were issued to drill new wells in the shallow water of the Gulf of Mexico in November.
Crude oil was trading higher on Monday morning after falling on May 13. The hopes of supply glut easing are supporting crude oil prices.
The PBV (price-to-book value) ratios of Helmerich & Payne, Transocean (RIG), Noble Corporation (NE), and Nabors Industries (NBR) are 1.2x, 0.38x, 0.46x, and 0.58x, respectively.
Helmerich & Payne (HP) has a market cap of $5.8 billion. After its fiscal 4Q15 earnings report, HP fell by 3.6% to close at $53.44 per share on November 12, 2015.
CyberArk has generated returns of 86.3% for the trailing-12-month period and 10.6% in the trailing-one-month period.
Wholesale gasoline prices have declined by over 40% since June, tracking the decline in crude oil prices.
The fracking revolution and the plunge in prices have rendered the Oil Peak premise false. So alternative fuel companies are being hurt by cheaper oil.
According to estimates by Barclays, the industry could save up to the tune of $10 billion in fuel costs, making airlines lower oil price winners.
A rising dollar has and will continue to put downward pressure on oil prices, causing trouble for the energy sector (XLE).
The drop in oil prices is affecting the global equity markets (QWLD). The S&P 500 (SPY) also declined by 3.5%, the worst weekly decline in two years.
Customs data showed that net fuel exports in May, 2014, were 410,000 tons, or 92,580 bpd, compared to net imports of 340,000 tons in April and 1.25 million tons last year.
As a result of the Department of Commerce ruling, shipment of condensates could begin as soon as August.
For much of 2014, equities advanced despite disturbing world news headlines. However, that changed last week because there is a clear link between the events in Iraq and the global economy: energy prices.
The long-term outlook across the shipping industry is positive.
With the Baltic Dirty Tanker Index touching 711 in mid-March of 2014, it has now heated up and reached its highest level since then by touching 721 in its close last week.
About 45.8% of Diamond Offshore’s revenues came from Brazilian companies in 2012. Any changes within the Brazilian economy would impact Diamond Offshore heavily.
Because of a low-debt–low-cost strategy, Diamond Offshore is able to maintain the highest credit ratings among its peers.
Since the Macondo incident in April of 2010, Diamond Offshore continues to lag behind financially.