uploads/2019/03/P3-2.png

Analyzing Energy Underperformers Last Week

By

Updated

Energy stocks

In the week ending March 1, oilfield services stock Weatherford International (WFT) fell 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).

Article continues below advertisement

Other underperformers

Superior Energy Services (SPN) and Oil States International (OIS) were fourth and fifth among the energy stock underperformers last week. Upstream stocks, California Resources (CRC) and Denbury Resources (DNR) had the second and third most losses among energy stocks. OIH and XOP fell the most among major energy subsector ETFs, which we discussed in Part 2.

On February 27, Denbury Resources’ adjusted net income was 11% above analysts’ consensus estimates. Based on the company’s guidance midpoint, Denbury Resources’ production is expected to fall 4% in 2019—compared to 2018. Since February 27, Denbury Resources has fallen 22.4%.

For oilfield services stocks, the weakness in oil prices and the contraction in the US oil rig count might be a concern for investors. Last week, US crude oil prices rose 0.5%. In Part 1, we discussed the steep fall in the oil rig count. This month, the US oil rig count could fall more, which might keep a lid on oilfield services stocks this week despite a possible upside in oil prices.

Advertisement

More From Market Realist