Schlumberger’s returns and the industry
Schlumberger’s (SLB) one-week returns were 0.3% as of February 23, 2018. In comparison, since February 16, 2018, the Energy Select Sector SPDR ETF (XLE) has risen 1%, and the VanEck Vectors Oil Services ETF (OIH) has risen 2.2%. SLB underperformed OIH and XLE in the past week. It has also underperformed the SPDR S&P 500 ETF (SPY) since February 16, 2018, which returned 0.6%. SLB accounts for 0.39% of SPY.
Crude oil price and rigs
On February 23, 2018, the price of WTI (West Texas Intermediate) crude oil was 3% higher than the previous week. Led by crude oil’s strength, three additional rigs came online in the United States last week. You can find out more about the latest energy prices in Market Realist’s US Crude Oil Inventories Add Bullish Momentum to Oil Futures.
Some factors that affected SLB’s returns
- On February 23, 2018, SLB entered into negotiations to form a joint venture with Subsea 7. The joint venture will be owned 50% by Subsea 7 and 50% by Schlumberger. If the JV is formed, it is expected to strengthen the front end engineering, design, and execution of integrated projects.
- On February 21, 2018, SLB received a project award from upstream producer Noble Energy (NBL). SLB will provide an engineering and supply contract for a process module to be installed on the Leviathan Platform in the Eastern Mediterranean.
- SLB has redeployed an additional pressure pumping fleet following recent strong hydraulic fracturing activity in North America.
- SLB has seen a decline in seasonal wireline activity in Russia.
- SLB has had higher project volume and increased service revenue in the Cameron group, led by OneSubsea.
In this series, we’ll be looking at Schlumberger and its correlation with crude oil. Let’s start by looking at its stock price forecast.