Schlumberger’s one-week return
Schlumberger (SLB), posting a one week-return of -3.9% on March 16, 2018, underperformed several funds and indexes. In comparison, the Energy Select Sector SPDR ETF (XLE), which tracks an index of US energy companies, returned -1.7%. The VanEck Vectors Oil Services ETF (OIH), which tracks an index of 25 oilfield equipment and service companies, returned -2.0%, and the SPDR S&P 500 ETF (SPY) returned -1.7%. SLB accounts for 0.39% of SPY.
Crude oil price and rigs
On March 16, 2018, the WTI (West Texas Intermediate) was 0.5% higher than a week prior. Led by crude oil price’s strength, six additional rigs came online in the United States in the week ended March 16. For the latest on energy prices, read Energy Investors: Keeping an Eye on Wall Street.
What’s affected SLB’s returns
- On February 23, 2018, SLB entered into negotiations to form a JV (joint venture) with Subsea 7, with each company owning 50%. The JV, if formed, is expected to strengthen the front end engineering, design, and execution of integrated projects.
- On February 21, 2018, SLB was awarded a project by 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.
- A larger pressure pumping fleet has been redeployed following strong hydraulic fracturing activity in North America.
- Cameron, led by OneSubsea, has seen higher project volume and increased service revenue.
- Wireline activity has seen a seasonal decline in Russia.
In this series, we’ll look at Schlumberger and its correlation with crude oil. We’ll discuss Schlumberger’s stock price forecast next.