Oil Pushed Upstream Stocks in the Energy Space



Energy stocks

In the week ending February 15, Denbury Resources (DNR) rose the most among the energy stocks under review in this series, which include the following ETFs:

  • the Alerian MLP ETF (AMLP)
  • the Energy Select Sector SPDR ETF (XLE)
  • the VanEck Vectors Oil Services ETF (OIH)
  • the VanEck Vectors Oil Refiners ETF (CRAK)
  • the SPDR S&P Oil & Gas Exploration & Production ETF (XOP)

In addition to US energy companies, a few foreign-headquartered integrated energy companies listed in the United States are also under review including Imperial Oil (IMO) and China Petroleum & Chemical (SNP).

Other strong performers

XOP had the largest rise among the major energy subsector ETFs. The rise of 5.4% in US crude oil prices might have supported Denbury Resources (DNR). Apart from oil’s rise, a 1.6% rise in natural gas prices might have helped other upstream stocks like PDC Energy (PDCE), California Resources (CRC), and SM Energy (SM) hold the third, fourth, and fifth positions on our list of the top energy gainers.

On February 11, PDC Energy announced its capital expenditure and production guidance for 2019. In 2019, PDC Energy’s management expects the total capital expenditure to be $810 million–$870 million, which is $150 million below the level in 2018. In 2019, the production might rise 20%.

Last week, NGL Energy Partners (NGL) was the second-largest gainer among energy stocks. AMLP was the second-lowest gainer among the major energy subsector ETFs. On February 11, AMLP reported a diluted income of $0.64 per common unit, which beat analysts’ consensus estimates by 700%. On the same day, the stock rose 5.8%.

Apart from oil and natural gas’ rise, the 2.5% rise in the S&P 500 Index (SPY) might have boosted these energy gainers.

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