iShares US Energy

On October 27, Antero Resources Corporation announced the initial public offering of Antero Midstream Partners LP.

Antero Resources’ current acreage is focused in the Marcellus Shale in West Virginia and the Utica Shale in Ohio.

Cheniere Energy, Inc.’s MLP company’s Sabine Pass liquefaction project has already secured four fixed-price, 20-year sales and purchase agreements with third parties.

Chevron Corporation is currently trading at EV-to-2014E EBITDA of 5x, has an approximately $239 billion market cap, and ~$245 billion enterprise value.

In 2015, Kinder Morgan (KMI) has put in place a strong project pipeline that can increase capex by 21% to ~$4.4 billion.

Reduced well costs is a major positive for KOG—Kodiak has been making progress on improving its well costs, moving from over $10.5 million per well to under $9 million in 2014.

Transocean (RIG) plans to release its 1Q17 results on May 3, 2017, after the market closes.

The rate of decline in the natural gas rig count has slowed in the past four weeks, during which only six rigs went offline.

Royal Dutch Shell (RDS.A) plans to sell its oil fields in Iraq. The sale could be due to Shell’s restricted authority on the fields.

The EIA estimates that Iran’s crude oil production was flat at 3.81 MMbpd in April 2017—compared to March 2017. Production rose 8.8% YoY.

The events in the energy sector influence crude oil and natural gas prices. The ups and downs in crude oil prices impact oil and gas producers’ earnings.

Analysts estimate that Cushing inventories could have declined on March 2–9. The EIA is scheduled to release its crude oil inventories report on March 14.

In 4Q15, according to Wall Street analyst estimates, Valero is expected to post EPS of $1.40, which would be 23% lower than its 4Q14 adjusted EPS.

Many offshore drillers have scrapped their older rigs to reduce costs. Although scrapping rigs reduces costs, it also negatively impacts the earnings potential of the company.

Noble Corporation’s (NE) contract drilling revenue was $354.0 million in 1Q17 compared to $591.0 million in the same period last year.

In 4Q14, AQR Capital lowered the number of shares held in EOG Resources (EOG). EOG accounted for 0.22% of the fund’s fourth-quarter portfolio.

The US crude oil rig count rose by eight to 617 rigs from March 3–10, 2017. The US crude oil rig count has risen 33 times in the last 36 weeks.

SandRidge Energy updated its 2014 guidance given its Gulf of Mexico divestiture. The new cost guidance shows lower lifting costs per unit.

Analysts expect Transocean’s (RIG) 3Q17 EBITDA to fall to $313 million—a 10% fall from $349 million reported in 2Q17 and a 31% fall year-over-year.

In February 2015, Cheniere Energy announced that its 4Q14 and full-year results reported a net loss attributable to common stockholders of $158.6 million, or $0.70 per share.

Despite COG’s recent negative stock market movement, the fact that it was able to hold its own and sustain significant levels of production should ensure that it maintains relatively high stock market returns.

What are Schlumberger’s views on North America?  Schlumberger (SLB) expects the North American onshore market to continue to improve in 2017. In Schlumberger’s 1Q17 earnings press release, chairman and CEO Paal Kibsgaard stated that “at present, the region in the world showing clear signs of increased E&P[1.exploration and production] investments in 2017 is North America […]

The expected 2Q15 earnings are 37% lower than 1Q15 adjusted EPS. Weaker crude oil prices and reduced spending by North American upstream energy producers are to blame.

The EIA’s weekly gasoline and diesel fuel price update released on January 11, 2016. It showed that US regular gasoline prices averaged $1.99 per gallon.

A large portion of ExxonMobil’s earnings come from “non-operating” sources. This reflects the sheer scope of the company’s operations.

We’ll take a look at recent recommendations that brokers have provided for Cheniere Energy Partners (CQP) ahead of its 2Q15 earnings release on July 29.

For the offshore drilling industry, we believe that the EV-to-EBITDA multiple reflects the perceived riskiness of investing in offshore drilling companies, as well as investors’ expectations for the industry’s outlook.

In its weekly report on June 3, the EIA reported that US crude oil refinery inputs averaged ~16.4 MMbpd during the week ending May 29.

Short interest in Schlumberger (SLB) stock as a percentage of its float was ~1.2% on March 3, 2017, a marginal fall compared to December 30, 2016.

US crude oil (BNO) (USO) (UCO) (IEZ) prices are near an 18-month high as of February 6, 2017. The S&P 500, Dow Jones, and NASDAQ are near all-time highs.

Total (TOT), an integrated energy major, has three main segments: upstream, refining and chemicals, and marketing and services.

A larger decline in Cushing inventories could have a positive impact on oil prices. US crude oil futures rose 1.8% to $62.41 per barrel on March 16, 2018.

Regional chemical margins where Royal Dutch Shell’s (RDS.A) chemical operations are carried out are indicators of Shell’s chemical margins.

In its weekly Petroleum Status Report released on Thursday, the EIA announced a decrease of 2.8 MMbbls in crude oil inventories for the week ending May 22.

Rate cut transmissions by commercial banks, inflation, and monetary policy actions by the Fed will have the largest influence on India’s future.

Although not considered safe haven assets, in the current context of high geopolitical risk and consequently volatility, investors could consider investing in sectors like energy and large cap companies.

The RBI had headroom to make a further rate reduction in August, but then the bank resisted, citing the rise in core inflation.

After analyzing BP’s (BP) 2Q15 performance by segment, we’ll now discuss its year-to-date (or YTD) revenues and earnings.

On Friday, August 29, prices closed at $95.96 per barrel. On Tuesday, prices dropped to $92.88—a 3% decrease. On Wednesday, prices came back to $95.54 per barrel, again ~3% higher than the previous day’s market close.

Devon plans to rapidly grow production in the Eagle Ford over the next few years.

According to the EIA’s June 24 report, crude oil inventory decreased 4.9 MMbbls for the June 19 week. Analysts were expecting a much smaller decrease of 2 MMbbls.

Refiners’ profits are driven by the difference in the prices of refined products—like gasoline and diesel—and the cost of crude oil. Refining companies didn’t lose as much as their upstream peers.

Cushing, Oklahoma WTI prices fell to $41.93 a barrel on August 17—the lowest since early March 2009. Iran flooding the market with its oil is one of the reasons for this fall.

Superior Energy Services’ (SPN) CFO (cash from operating activities) fell 63% in 3Q16 year-over-year. SPN generated $48 million CFO in 3Q16.

The EIA reported that gasoline inventories decreased by 2.8 MMbbls to ~223.9 MMbbls in the week ending May 15. Analysts expected inventories to increase.

US distillate fuel inventories fell by ~1.1 MMbbls (million barrels) to settle at 164.5 MMbbls for the week ending January 15, 2016.

Valero’s total refining capacity is 3.0 MMbpd (million barrels per day), of which 1.7 MMbpd is located in the US Gulf Coast.

In this part, we’ll look at ExxonMobil’s (XOM) profitability at various levels and its returns in different contexts.

Net income reported for this quarter reflected discontinued operations at Valero’s Aruba refinery—as a result of this, the company recognized a loss of $63 million associated with asset retirement and other obligations related to the Aruba refinery.

WFT makes up 0.33% of the iShares U.S. Energy ETF (IYE). On June 7, IYE had fallen 8% lower compared to its price on March 31.

According to oil service company Baker Hughes (BHI), the horizontal rig count fell by seven in the week ended May 15, 2015, compared to the previous week’s count.

Schlumberger (SLB) thinks that the crude oil market sentiment has been a positive catalyst for oilfield equipment and services companies.

Gasoline production increased from 9.93 million barrels per day (or MMbpd) in the week of June 19 to 10.04 MMbpd in the week ended June 26.

PointLogic, a market intelligence company, estimates that US dry natural gas production rose 0.3% to 80.1 Bcf per day on April 5-11, 2018.

November WTI (West Texas Intermediate) crude oil futures contracts rose 1.4% to $51 per barrel in electronic trade at 5:20 AM EST on October 19, 2016.

A Reuters survey estimates that Libya’s crude oil production rose by 50,000 bpd to 930,000 bpd in September 2017—compared to the previous month.

A wider crack spread increases the profit margins of refiners such as Valero Energy (VLO), Phillips 66 (PSX), Marathon Petroleum (MPC), and Tesoro (TSO).

April gasoline futures fell 2.4% to $1.65 per gallon on March 8, 2017. Prices fell despite the massive fall in US gasoline inventories.

Wall Street’s forecasts for Halliburton include ~76% of analysts rating the company as a “buy” or some equivalent.

Crude oil prices were $54.1 per barrel on December 28—the highest since July 14, 2015. As of January 16, 2017, crude oil prices are 3.4% below their highs.

June WTI (West Texas Intermediate) crude oil (IXC) (IYE) (USO) futures contracts have risen ~5% from their five-month low as of May 15, 2017.

Exxon Mobil has three major business segments: Upstream, Downstream, and Chemical. Upstream contributes the most to XOM’s earnings.

The EIA estimated that US crude oil inventories fell by 3.4 MMbbls (million barrels) to 453.7 MMbbls on November 17–24, 2017.

Of the 32 analysts covering Ensco (ESV), 44% recommend a “buy” or equivalent for the stock.

PointLogic estimates that US dry natural gas production increased 0.6% to 80.1 Bcf (billion cubic feet) per day on April 19–25.

On February 9, 2017, US crude oil futures contracts for March delivery closed at $53.00 per barrel—an ~1.3% rise compared to the previous trading session.

Cushing crude oil inventories have fallen 10% in the last ten weeks. A better-than-expected fall in Cushing inventories could support US crude oil prices.

Cheniere Energy, Inc., is a Houston-based energy company engaged in the liquefied natural gas business.The Sabine Pass liquefaction project is one of the first projects to receive the necessary government permits to export liquefied natural gas.

Crude oil prices fell due to the API’s bearish crude oil inventory report. Prices have been trading between $50 per barrel and $54 per barrel since January.

The failure of OPEC’s plan to cap production and successful implementation of Donald Trump’s energy policies would mean a period of lower crude oil prices.

US crude oil refinery inputs averaged 17.029 million barrels per day (or MMbpd) during the week ended August 7.

The US is the world’s third-largest crude oil producer. US crude oil production rose by 15,000 bpd to 9,320,000 bpd on May 12–19, 2017.

October US crude oil futures contracts fell 0.3% to $46.31 per barrel in early electronic trading on August 30, 2017.

But XOM managed to generate positive segment revenue and earnings in 2016, which places XOM in a better position than CVX for dividend chasers.

Cushing crude oil inventories have fallen for the ninth time in ten consecutive weeks. Any fall in Cushing inventories is bullish for crude oil prices.

Industrials, utilities, and telecommunications have much higher leverage, as these sectors have massive capital needs.

Hedge funds increased their net long positions in US crude oil futures and options by 43,861 contracts or 18.4% to 282,362 contracts on July 25–August 1.

Hedge fund manager Pierre Andurand expects OPEC to implement its plan to cap production. Prices could hit $60 per barrel by the end of 2016 if OPEC succeeds.

On July 2, a Reuters survey showed that OPEC’s crude oil production increased by 320,000 bpd (barrels per day) to 32,320,000 bpd in June.

Saudi Arabia’s crude oil production increased by 60,000 bpd to 10,120,000 bpd in May—compared to the previous month.

On June 11, US crude oil July futures rose 0.5% and settled at $66.10 per barrel.

The EIA (U.S. Energy Information Administration) estimates that Libya’s crude oil production rose by 160,000 bpd (barrels per day) to 1.0 MMbpd (million barrels per day) in July 2017 compared to the previous month.

Reuters estimates that Saudi Arabia’s crude oil production increased by 700,000 bpd to 10,700,000 bpd in June—compared to the previous month.

In 3Q15 and 4Q15, Total’s valuation was higher due to lower EBITDA (earnings before interest, tax, depreciation, and amortization) and cash flows.

So, by the time any other facilities come online, Cheniere’s facilities will already be in place. And, Cheniere is likely to enjoy its front-of-the-line advantage for a little while longer.

The US Energy Information Administration (or EIA) released its “Weekly Petroleum Status Report” on October 12. It estimates that US crude oil production fell by 81,000 bpd (barrels per day).

US crude oil production rose 0.3% week-over-week and 5.3% year-over-year. US crude oil production is near the highest level since August 21, 2015.

It’s very apparent that the historical beta of XOP is higher than that of its peers, as it’s closer to 1.6 than the average of 1.2.

In the week ending April 13, US crude oil inventories fell by 1.1 MMbbls (million barrels) to ~427.6 MMbbls.

Pacific Drilling’s shareholders approved a one-for-ten reverse stock split of the company’s common shares.

As of January 11, 2017, Petrobras (PBR) has been rated by 18 analysts. Four of them rated the company a “buy” or “strong buy.”

Despite development of factors that could have lended support to WTI oil prices, oil prices failed to recover and in fact were trading close to $86 on Thursday.

So far, crude oil prices and broader markets such as the S&P 500 (SPY) (SPX-INDEX) are diverging in 2017. SPY has risen 4% YTD (year-to-date).

A large rise in US crude oil inventories pressured crude oil prices. OPEC’s struggle with its plans to cap production pressured crude oil prices.

According to the EIA’s Short-Term Energy Outlook released on June 9, diesel fuel retail prices will average $2.88 per gallon in 2015, and then rise to $3.04 per gallon in 2016.

Iraq is home to the fifth-largest oil deposits in the world and currently produces about 4% of the global oil supply. Iraq is now the second-biggest producer in the OPEC exporters’ cartel, after Saudi Arabia.

US WTI (West Texas Intermediate) crude oil (FXN) (ERY) (RYE) (FENY) prices are near a 19-month high as of February 28, 2017.

US crude oil rigs are near a five-month low. West Texas Intermediate (or WTI) crude oil (UWT) (DWT) prices are down 8.8% year-to-date (or YTD).

Occidental Petroleum Corporation (OXY) engages in oil and gas exploration and production in the U.S., Latin America, and the Middle East.

Due to its superior performance, Wall Street expects YPF to fetch the highest returns over the next 12 months among other integrated energy companies.