Halliburton’s (HAL) 1Q17 revenues increased ~2% to $4.3 billion from ~$4.2 billion in 1Q16. Compared to 4Q16, its revenues increased 6%.
In this series, we’ll compare Schlumberger, Halliburton, Weatherford International, and National Oilwell Varco. These OFS companies have posted negative returns since 1Q17.
For the week ending May 19, 2017, the natural gas (BOIL) (GASX) (FCG) (GASL) rig count was 180—eight rigs more than the previous week.
Natural gas (GASX) (FCG) (GASL) July futures rose 0.5% on May 17–May 24, 2017. During this period, the US dollar (UUP) (UDN) (USDU) fell 0.3%.
According to EIA data announced on May 18, there was an addition of 68 Bcf to natural gas (GASX) (FCG) (GASL) inventories for the week ending May 12, 2017.
On May 24, 2017, natural gas July futures closed at ~$3.30 per MMBtu (million British thermal units)—0.4% below the previous closing price.
The EIA released its weekly crude oil report on May 24, 2017. US gasoline inventories fell by 0.8 MMbbls to 239.9 MMbbls on May 12–19, 2017.
The US is the world’s third-largest crude oil producer. US crude oil production rose by 15,000 bpd to 9,320,000 bpd on May 12–19, 2017.
The EIA released its weekly crude oil report on May 24, 2017. US crude oil inventories fell by 4.4 MMbbls to 516.3 MMbbls on May 12–19, 2017.
The US dollar (UUP) fell 0.1% to 97.15 and the S&P 500 (SPY) (SPX-INDEX) hit an all-time high after the Fed’s meeting minutes were released.
US crude oil futures rose more than 9% after OPEC’s previous meeting in November 2016. On May 24, 2017, prices are near a one-month high.
Crude oil prices closed almost flat on Wednesday due to mixed sentiment. Crude oil prices are volatile in the early hours on May 25.
The United Kingdom’s FTSE 100 index regained strength on May 24. On Thursday, the FTSE 100 index opened the day higher and traded at record price levels.
Valero’s crack indicators have fallen in all of these areas in May 2017 (as of May 23) as compared to April 2017.
In 2Q17 to date, Tesoro’s refining index values, which refer to regional crack indicators in the areas where TSO operates, have shown improvements
MPC’s refining earnings are influenced by the blended LLS 6-3-2-1 crack, the sweet-sour differential, and the LLS-WTI spread.
The higher the production of high-value, lighter products (like gasoline), the better the refining margins are for US refiners like MPC, TSO, VLO, and PSX.
All four of our select US refining giants saw a rise in their gross refining margins in 1Q17 over 1Q16.
Tesoro (TSO) achieved a 92% refinery utilization rate in 1Q17—the highest among our select group of four major US refiners.
Tesoro (TSO) has the highest TTM ROE at 13%. MPC and PSX have lower TTM ROEs of 9% and 8%, respectively, while VLO’s TTM ROE stands at 10%.