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EQT: Top Underperformer in the Energy Sector

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Energy stocks

Last week, upstream stock EQT (EQT) fell the most among the stocks in the energy space. The stock is included in 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)

On June 19, EQT released its investor presentation report. The report contained preliminary operational and financial results for the second quarter. EQT expects its sales volume in the second quarter to be near the upper bound of the earlier stated production guidance of 355 Bcf–375 Bcf (billion cubic feet) equivalent. The adjusted cash flow might rise by $25 million from the previous guidance. The announcement was also to counter Toby Rice Group’s concerns about the efficiency of EQT’s management. On June 19, EQT’s stock prices fell 5%. Last week, natural gas prices fell 8.9%. EQT operates with a production mix of ~95% in natural gas.

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Other underperformers

Midstream stocks Crestwood Equity Partners (CEQP), TC PipeLines (TCP), Cheniere Energy Partners (CQP), and Western Gas Partners (WES) had the second, third, fourth, and fifth-largest declines among energy stocks, respectively, last week. In general, the midstream space had the lowest rise among energy subsectors. Last week, the Brent-WTI spread fell to the lowest level since April 16. The difference between Light Louisiana Sweet and WTI at Cushing also contracted to the lowest level since April 11. The contraction could impact midstream financials in the long term. The oil spread plays an important role in developing oil infrastructure.

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