5 Jan

Which Energy Commodity Is Rising in the New Year?

WRITTEN BY Nicholas Chapman

Crude oil and natural gas are rising

For the week starting January 1, 2018, crude oil prices have risen ~2%, from last week’s close of $60.42 per barrel to $61.63 per barrel on January 3, 2018. Even natural gas (UGAZ) (DGAZ) (BOIL) prices rose from their last week’s close of $2.95 per mmBtu (million British thermal unit) on December 29, 2017, to $3.01 per mmBtu on January 3, 2018, an increase of almost 1%.

Which Energy Commodity Is Rising in the New Year?

Gasoline is sluggish, heating oil rises

For the week starting January 1, 2018, unleaded gasoline (UGA) prices have risen marginally from their last week’s close of $1.796 per gallon on December 29, 2017, to $1.797 per gallon on January 3, 2018, an increase of ~0.1%. Two weeks before, gasoline prices regained their 50-day moving average, which currently stands at $1.742. Even heating oil (UHN) prices have risen this week by ~1%. Gasoline and heating oil prices impact refining companies (CRAK).

Energy stocks

With the positive performance from all energy commodities, energy stocks are showing some strength this week. As of January 3, 2018, the Energy Select Sector SPDR ETF (XLE), which represents an index of stocks across the energy sector, rose ~3.2%.

Stocks that are leading the rise in XLE are the following:

  • Apache (APA): rose 7.4%
  • Noble Energy (NBL): rose 6.4%
  • Baker Hughes (BHGE): rose 6%

In general, for the week starting January 1, 2018, XLE is outperforming the SPDR S&P 500 ETF (SPY). As of January 3, 2018, SPY has risen 1.4% for the week.

In this series

Having analyzed the performance of the broader energy sector in the current week, we’ll look at the performance of energy sub-sectors in the rest of this series. Specifically, we’ll look at the gainers and losers from the integrated energy and refining and marketing sectors. We’ll also try to analyze any news or developments behind the moves.

Let’s start with the refining and marketing gainers for this week.

Latest articles

On June 25, AbbVie (ABBV) announced that it plans to buy Allergan (AGN) for ~$63 billion. At 10:20 AM ET, Allergan stock rose 27%, while AbbVie stock fell 15%.

On June 25, Credit Suisse initiated its coverage on Shake Shack with an “outperform” rating and a target price of $77—an upside potential of 15.4% from its closing price of $66.72 on June 24.

On June 25, the soft economic data isn't an isolated case. We have been getting a flurry of dismal data points. The US economy added only 75,000 non-farm jobs in May.

French retail giant Carrefour has agreed to sell an 80% stake in its China operations for ~$705 million to Suning.com, an Alibaba (BABA) backed company. While China represents a massive opportunity with its almost 1.4 billion population, it has not been an easy market for foreign companies, at least when it comes to retail and e-commerce.

On June 25, US Secretary of Agriculture Sonny Perdue told CNN in an interview that the US-China trade war has impacted US farmers. He said that farmers “are one of the casualties” of the trade war.

25 Jun

Hang Seng and Nikkei 225 Lose amid Trade Worries

WRITTEN BY Mayur Sontakke, CFA, FRM

After rising marginally yesterday, Hong Kong’s Hang Seng Index fell today. The index lost 1.15% to end at 28,185.98. Only seven stocks in the index rose, while 39 declined. Four remained unchanged. Tencent Holdings (TCEHY) was one of the worst performers with a 1.8% fall.