Performances of integrated energy stocks
In the second quarter of 2019, Royal Dutch Shell (RDS.A) stock rose 4.0%, but its peers ExxonMobil (XOM) and BP (BP) fell 6.2% and 4.8%, respectively. Chevron (CVX) stock closed almost flat in the second quarter.
How the market and oil performed in the second quarter
Because the market and oil affect integrated energy stocks, let’s have a look at their performances in the second quarter of 2019.
In the quarter, WTI, the benchmark crude oil, fell 1.7%. In the same quarter, oil prices fell due to expectations of lower demand growth and higher supply from the US. However, in the latter half of June, tensions between the US and Iran rose, which lifted oil prices. The expectation that OPEC will continue to make production cuts in its upcoming meeting has been further supporting oil prices.
The US equity market, represented by the SPDR S&P 500 ETF (SPY), rose 1.2% in the second quarter. In June, the market gained on interest rate cut expectations. Issues between the US and Mexico also eased in the month, but this improvement was partly offset by rising tensions in the Middle East.
Integrated energy companies’ earnings fell in the first quarter. They posted mixed performances compared to Wall Street’s estimates. While ExxonMobil (XOM) missed analysts’ earnings estimate, Chevron, Royal Dutch Shell, and BP surpassed analysts’ expectations.
Integrated energy stocks reacted accordingly to the second quarter’s mixed cues. Presumably, lower oil prices affected the stocks, while higher equity markets supported them. Some stocks were also affected by their mixed first-quarter earnings results.