Market Vectors® Oil Services ETF

For most of the last two years, WTI crude oil has been range-bound between ~$85 per barrel and ~$110 per barrel.

In the week ending September 18, 2015, the US offshore rig count didn’t change. The offshore rig counts have averaged 33 over the past eight weeks.

The offshore drilling industry made headlines last week, especially Seadrill (SDRL), which reached a 52-week high of $0.73.

Let’s track some important events for oil and gas traders from August 14 to 18, 2017.

Schlumberger Limited is a Houston-based energy company. It provides technology, integrated project management, and information solutions to oil and gas exploration and production (or E&P) companies around the world.

Between April 16 and April 23, Halliburton (HAL) stock’s price correlation with crude oil was 0.99, showing that Halliburton and crude oil prices have been strongly correlated in the past week.

Offshore drilling companies are capital-intensive and have varying degrees of financial leverage. Thus, we use the EV-to-EBITDA multiple as a valuation.

Halliburton’s (HAL) stock price correlation with crude oil on July 20–27 was 0.22—a moderately positive correlation.

By market capitalization, Schlumberger is the largest OFS company. Schlumberger’s stock price has declined 4% since May 3, 2017.

Oil is one of the most important and most frequently traded commodities, and offshore drilling is an integral part of the oil industry.

In the past year, Schlumberger’s stock price rose until January 2017. Schlumberger’s revenue fell slowly in the four quarters leading up to 1Q17.

At ~65.2%, the VanEck Vectors Oil Services ETF (OIH) showed the highest correlation with US crude oil between April 4–May 4, 2017.

Schlumberger’s yearly price-to-earnings ratio is in line with the group. Haliburton has the lowest price-to-earnings ratio.

Since April 26 when National Oilwell Varco released its Q1 2018 financial results, NOV stock has risen 10%.

On September 27, 2017, the EIA estimated that US crude oil production rose 37,000 bpd (barrels per day) to ~9.5 MMbpd from September 15–22, 2017.

On August 30, US crude oil October futures settled at $55.1 per barrel. On a week-over-week basis, US crude oil prices rose 1.7%.

Between February 11, 2016, and July 15, 2019, WTI crude oil prices rose 127.3%. The United States Oil Fund LP (USO) gained 53.9% in the period.

US crude oil active futures have risen 8.6% in the trailing week, which might have boosted or limited the downside in OIH, XOP, XLE, and AMLP. They have returned 5.8%, 5%, 3.7%, and -0.7%, respectively.

Last week, the oil rig count fell by three to 802—the lowest level since March 30.

Weatherford International released its 1Q18 earnings results today.

Flotek Industries’ (FTK) forward EV-to-EBITDA multiple is at the steepest discount to its current EV-to-EBITDA multiple on March 9, 2018.

On January 19, 2018, Baker Hughes released its weekly US crude oil rigs report. US crude oil rigs decreased by five to 747 on January 12–19, 2018.

Iraq’s crude oil exports hit 3.98 MMbpd (million barrels per day) in September 2017, according to Bloomberg—its highest level since December 2016.

Hedge funds reduced their net long positions in US crude oil futures and options by 12,094 contracts to 157,891 contracts on September 5–12, 2017.

The US Dollar Index fell 0.27% to 91.86 on September 15. It’s near a 33-month low. Prices fell due to the surprise decline in US retail sales in August.

The EIA (U.S. Energy Information Administration) released its weekly crude oil inventory report on September 13.

The US Dollar Index fell 0.34% to 91.33 on September 8—the lowest level in the last 33 months. Prices fell due to the following factors.…

How TechnipFMC intends to maintain its yield FMC Technologies and Technip merged to become TechnipFMC (FTI) in 2017, an international provider of subsea, onshore, offshore, and surface projects. The synergy aims to combat the challenges of low oil prices and a challenging outlook through cost cutting and the enhancement of efficiency. The company recorded 51% revenue […]

Let’s track some important events for oil and gas traders between August 28 and September 1, 2017.

The EIA reported that US crude oil inventories fell by 8.9 MMbbls or 1.8% to 466.4 MMbbls on August 4–11, 2017—the biggest draw since September 2016.

September WTI (West Texas Intermediate) crude oil (OIH) (SCO) (DIG) futures contracts rose 0.5% to $47.81 per barrel in electronic trading at 1:50 AM EST on August 16, 2017.

The EIA released its Short-Term Energy Outlook report on August 8, 2017. It estimates that US crude oil production could average 9.35 MMbpd in 2017.

The correlation coefficient between the West Texas Intermediate (or WTI) crude oil price and Schlumberger’s (SLB) stock price between August 4, 2016, and August 4, 2017, is 0.62.

From December 2014 to December 2016, Halliburton’s (HAL) stock price reached the highest level in December 2016. It troughed at ~$28 in January 2016.

The oilfield equipment and services industry refers to all products and services associated with the oil and gas exploration and production process, or the upstream energy industry.

Historically, it seems that fallen angels generally perform well across interest rate environments.

The EIA reported that India produced 1 MMbpd (million barrels per day) of crude oil in 2014 and 2015. It’s expected to increase marginally in 2016 and 2017.

In fiscal 2015, RPC’s (RES) net-debt-to-EBITDA ratio stood at -0.54, down from the 0.34 it saw in 2014. The company’s long-term debt stood at zero in 2015.

Among the biggest ETFs in the offshore drilling space, investors can choose between ETFs like OIH, XLE, and IYE for exposure to offshore drilling.

The offshore drilling process requires complex machinery and large crews. At every stage, things that can go wrong, so each stage requires special care.

By October 30, 2015, the total US rig count fell by 16 crude oil rigs. The number of crude oil rigs has continued to fall in the past nine weeks.

Overall, Rowan Companies (RDC) has a comparatively stronger backlog. Higher backlogs are associated with stable revenues in the short to midterm, which reduces risk for investors.

Business fixed investment represents business spending on plants, equipment, and machines. It forms an important component in the calculation of economic output.

Halliburton (HAL) is a Texas-based energy company. It’s an oil and gas equipment and service provider. In the past year, Halliburton’s stock price went down ~22%.

In India, the consumption of oil products saw steady growth over the years. The CAGR (compound annual growth rate) for the ten years ending in March 2014 is above 3.5%.

Before moving on to India’s petroleum consumption, production, and refining, it would be beneficial to take a look at the various products that India produces and consumes.

Deepwater Horizon was a deepwater, offshore oil drilling rig owned by Transocean (RIG) and operated by BP Plc. (BP). On April 20, 2010, while drilling at the Macondo Prospect, there was an explosion on the rig caused by a blowout that killed 11 crew members.