PetroChina Co Ltd

On January 20, 2016, Shell began recuperating from the falls it had experienced in the previous year. Shell has risen 49% since January 20, 2016.

The market is expecting that after the ban is lifted, Iran will be the leading natural gas producer in OPEC. The cartel has been led by Saudi Arabia.

In the previous two parts of this series, we covered bullish drivers for crude oil prices. Now let’s look at some key bearish drivers for crude oil prices in 2016.

Multiyear low crude oil prices impact domestic and international oil producers’ margins like PetroChina, Comstock Resources, Whiting Petroleum, and Denbury Resources.

Current lower oil prices and growth from China, India, the United States and Asia Pacific countries will drive crude oil consumption in the long term.

Real estate and construction are the two important drivers of China’s economic growth. They account for more than 20% of China’s gross domestic product (or GDP) when you also factor in cement, steel, chemicals, furniture and other related industries.

The EIA reported that OPEC’s crude oil production rose by 510,000 bpd (barrels per day) to 32.7 MMbpd (million barrels per day) in June 2016.

Shell’s stock had a weak opening to 2016. It traded below its 50-day and 200-day moving averages at the beginning of the year. Its share price touched a trough on January 20, 2016.

China’s crude oil production could fall by 3%–5% in 2016. The fall in China’s crude oil production would be substituted by the rise in China’s crude oil imports.

The SSE Composite Index fell by 1.8% from December 2 to December 9 and closed at 3,472.44 on December 9, 2015.

As percentages of the worlds’ total reserves, Russia holds 45% of the gas, 23% of the coal, 14% of the uranium, and 13% of the oil. Currently, Russia is the world’s largest energy supplier.

Citigroup estimates that global crude oil supply outages could currently be around 3.5 MMbpd (million barrels per day).

So far, BP stock has fallen 18% in the fourth quarter due to the fall in oil prices. WTI, the benchmark oil, has fallen 34% in the fourth quarter.

In the previous part of this series, we discussed Total’s historical valuation trends. Now we’ll compare its forward valuation with that of its peers.

Although crude oil started the day on a weaker note, it regained strength on Friday, July 1. Baker Hughes reported that the oil rig count increased for the fourth time in the past five weeks, adding 11 new rigs to reach 341 rigs.

Manufacturing growth in China stalled in April, after rising in March. According to the National Bureau of Statistics’ report, China’s PMI held steady at 50.10 in April.

The correlation coefficient of BP’s stock versus WTI (West Texas Intermediate) for the 12-month period stands at 0.65.

Royal Dutch Shell stock has risen 6% in the first quarter of 2019 led primarily by a recovery in oil prices and a rise in equity markets.

The US dollar plays a major role in the price movements of commodities such as gold and crude oil. A strengthening US dollar is often seen as negative.

World economic growth will boost oil consumption, and the demand for crude oil will increase. This will lead to higher crude oil prices in the long term.

Implied volatility in Equinor (EQNR) has risen by 1.5 percentage points over April 1, 2019, to the current level of 27.3%.

Based on market capitalization, ExxonMobil (XOM) is the world’s largest publicly listed oil and gas company.

Chevron’s (CVX) first-quarter earnings fell due to its lower Upstream and Downstream earnings.

Total (TOT) announced its first-quarter earnings on April 26, 2019.

Chevron (CVX) released its first-quarter earnings on April 26. The company paid $2.2 billion in dividends in the first quarter.

Suncor is expected to post its fourth-quarter earnings on February 5. The price range forecast will be based on the current implied volatility.

Total (TOT) stock has fallen 21% in the fourth quarter so far.

During the week ended July 6, US crude oil August futures and natural gas August futures fell 0.5% and 2.3%, respectively.

PetroChina (PTR) fell ~7.7% from the previous week’s close of $84.18 to $77.72 on June 14.

Before we look at Chevron’s (CVX) moving average since January 2, let’s briefly look at how moving averages trended until then.

To conclude our series on the biggest movers in the energy sector, we’ll look at the biggest losses from the US integrated energy sector this week.

Chevron’s moving averages In this part, we’ll look at Chevron’s (CVX) moving averages. Let’s start with its moving averages in the first nine months of 2017. In the beginning of 2017, Chevron’s 50-DMA (day moving average) slid down but stayed above its 200-DMA. The downtrend in Chevron stock extended to 2Q17. As WTI (West Texas […]

BP (BP) is now trading at a forward PE (price-to-earnings ratio) of 16.6x, above its peer average of 16.5x.

Cenovus Energy is the biggest loser this week from the integrated energy sector. It has fallen from last week’s close of $11.26 to $10.17 on November 15.

Russia’s energy ministry estimates that the country’s crude oil exports rose 2% or by 160,000 bpd (barrel per day) in the first nine months of 2017.

Implied volatility in ExxonMobil has fallen from 14.9% on April 3, 2017, to 13.6% to date.

Chinese exports in US dollar terms fell 7.7% in 2016 compared to 2015, making it the worst decline since 2009.

Shell’s beta In this part, we’ll compare Royal Dutch Shell’s (RDS.A) beta with peers’. We’ve considered the 90-day beta, which depicts how much a stock moves for a given move in the market for 90 days. Shell’s 90-day beta stands at 0.94, lower than integrated energy stocks’ average 90-day beta of 1.0. In comparison, Statoil’s […]

Short interest in Chevron Last year, short interest in Chevron (CVX) rose. However, since mid-December 2016, it has dropped by 38%, indicating that bearish sentiment for the stock has weakened. However, contrary to market sentiment, Chevron’s stock price has fallen 6%. In the same period, short interest in peers Statoil (STO), Petrobras (PBR), and PetroChina […]

Implied volatility in ExxonMobil (XOM) is currently 16.0%. On January 11, 2017, it was 18.0%.

In 3Q16, BP’s total debt-to-capital ratio stood at 38.9%, higher than the industry average of 36%. Its net debt-to-adjusted EBITDA ratio rose from 0.77x in 3Q14 to 2.3x in 3Q16.

Short interest in Chevron has been rising since the beginning of 2016. If we consider the change since mid-September 2016, CVX’s short interest has risen 10%.

Shell’s highest and lowest 12-month price targets stand at $66 and $53. It indicates a 27% and 2% rise from its current levels, respectively.

Suncor Energy (SU) announced its 3Q16 earnings on October 26 after market hours. On the day, in anticipation of results, SU opened at $28.9.

An analyst survey shows that six out of eight companies surveyed rated Suncor Energy (SU) an “overweight” or “outperform.”

The FOMC (Federal Open Market Committee) releases the SEP (Summary of Economic Projections) in four of the eight meetings in a year.

Analysts’ ratings for BP (BP) show that 31% of those covering the stock rate it as a “buy,” and 61% rate it as a “hold.”

Petrobras announced its earnings on August 11, 2016, after the Market closed. On that day, PBR’s stock opened at $8.47 per share.

Eni SpA (E) announced its 2Q16 earnings on July 29, 2016. On the same day, Eni opened at $30.23, marginally lower than the previous day’s close of $30.53.

Analyst surveys show that eight of the nine analysts surveyed rated Suncor (SU) a “buy,” “overweight,” or “outperform.”

On July 28, Shell’s implied volatility fell by 9% to 20.5 compared to the previous day.

Royal Dutch Shell (RDS.A) announced lower-than-expected earnings on July 28, 2016, before the markets opened.

Petrobras’s (PBR) institutional holdings currently stand at ~12%.

The average 12-month price target for Petrobras is $5.80, indicating a 32% loss from the current levels.

Suncor Energy’s (SU) implied volatility currently stands at 28.1. Since February 11, 2016, SU’s implied volatility has fallen by 46%.

Integrated energy companies such as ExxonMobil (XOM) are affected by volatility in crude oil prices. To what degree? This varies from company to company.

ExxonMobil’s price-to-earnings (or PE) ratio has generally shown an uptrend in the past two years. In 1Q16, the stock traded at a PE of 26.4x.

ExxonMobil’s (XOM) net debt-to-adjusted EBITDA stood at 1.4x in 1Q16. This was lower than the industry average ratio of 2.6x.

Shell’s net debt almost doubled over 1Q14 to $70 billion in 1Q16. This was led by a 77% rise in its total debt over 1Q14 to $81 billion in 1Q16.

The FOMC’s PCE inflation projections for 2016 have increased from 1.0%–1.6% in March to 1.3%–2.0% in June.

The World Bank projected that China’s economy will decelerate to a 6.7% growth rate in 2016, which would be 0.2 percentage points lower than one year prior.

In a recent Short-Term Energy Outlook Report, the EIA estimated that the global crude oil supply and demand gap averaged 1.2 MMbpd in 1H16.

BP produced 2.4 MMboepd from its worldwide operations in 1Q16. Of the company’s total production, 1.7 MMboepd, or 72%, comes from non-US operations.

Hedge fund managers had mixed opinions about China at the SALT (SkyBridge Alternatives) Conference. The conference ended on May 13.

According to customs data, China’s exports to the United States—the country’s biggest market—fell 9.3% YoY in April.

The expectation of rising crude oil production from Saudi Arabia could see crude oil prices under pressure. Iran will most likely increase production until it reaches pre-sanction levels.

Eni SpA (E) announced its 1Q16 earnings on April 29, 2016. On the same day, Eni opened at $32.7, marginally higher than the previous day’s close of $32.6.

According to the General Administration of Customs, China’s exports, in US dollar terms, jumped 11.5% YoY (year-over-year) in March.

PetroChina reported that China’s crude oil imports averaged 6.7 MMbpd in 2015. This is 9% more than China’s crude oil imports in 2014.

China’s exports fell sharply by 25.4% YoY (year-over-year) in February—compared to a decline of 11.2% in January. It was the largest decline since May 2009.

Crude oil prices have rallied 23% since hitting February 2016 lows. However, crude oil prices have fallen ~17% in 2016.

OPEC’s (Organization of the Petroleum Exporting Countries) crude oil production fell by 79,000 bpd (barrels per day) to 33.1 MMbpd (million barrels per day) in February 2016 compared to January 2016.

WTI (West Texas Intermediate) crude oil futures contracts for April delivery fell 0.88% and settled at $32.78 per barrel on Friday, February 26, 2016.

Some analysts believe that the unexpected drop in foreign trade was mainly due to a change in the timing of the Lunar New Year.

Some oil traders believe that a slowing Chinese economy might put pressure on crude oil prices to trade lower for almost a decade.

The Year of the Monkey is believed to be energetic and positive. Leading up to the New Year, the Shanghai Stock Exchange Composite Index was flat for the week ending February 5 and closed at 2,763.49 points.

Chinese energy companies CNOOC, China Petroleum & Chemical, and PetroChina fell below their 100-day and 20-day moving averages by an average of 11.6%.

Goldman Sachs suggests that crude oil prices could peak around $40 per barrel by the end of 2016 and bottom around $20 per barrel.

Chinese energy companies CNOOC, China Petroleum & Chemical, and PetroChina Company have fallen below their 100-day and 20-day moving averages.

Iran has between 30 MMbbls (million barrels) and 50 MMbbls of crude oil and other liquids stored in supertankers ready to hit the markets.

The Chinese energy companies CNOOC, China Petroleum & Chemical Corporation, and PetroChina have fallen below their 100-day and 20-day moving averages.

Chinese energy companies CNOOC (CEO), China Petroleum & Chemical Corporation (SNP), and PetroChina (PTR) have fallen below their 100-day and 20-day moving averages by an average of 2.2% and 6%, respectively.

A week after the sanctions on Iran were lifted, the growing closeness between China and Iran points toward the start of a new economic alliance.

China’s GDP data grew at 6.9% in 2015 as the Chinese economy has been cooling down. This represents China’s slowest growth rate since 1990.

Kuwait has the lowest cost of extraction of crude oil at $8.5 per barrel. Alternatively, Iran has a cost of extraction that lies around $12.6 per barrel.

OPEC will release its MOMR (Monthly Oil Market Report) on January 18, 2015. The monthly report will showcase the key production data and estimates for 2016.

Estimates by Reuters suggest that OPEC crude oil production fell by 20,000 bpd to 31.6 million barrels per day in December 2015 compared with the prior month.

February WTI (West Texas Intermediate) crude oil futures contracts are following a long-term falling trend. Crude oil prices fell by 65% in the past year.

The depressed energy market has erased just over $1 trillion of market capitalization from oil and gas companies around the globe.

The world’s largest producer of crude oil is Russia. It is also among the largest crude oil exporters.

The oil supply and demand gap is expected to fall from 1.7 MMbpd in 2015 to 0.6 MMbpd in 2016.

OPEC (Organization of the Petroleum Exporting Countries) kingpin Saudi Arabia produced 10.3 million barrels of oil per day in October 2015.

The Energy Ministry of Russia reported that Russia saw production levels of 10.7 million barrels per day of crude oil in November 2015.

The AQR Managed Futures Strategy Fund STR I (AQMIX) uses the modern alternative hedge fund strategy “Managed Futures” for investment purposes.

China’s stock market has been in turmoil since June 2015. Its stock market had been soaring, but after May, there was a share selloff, which led to a crash.

Due to recent stock market turbulence in China’s stock market, the SSE (Shanghai Stock Exchange) Composite Index was down 22.7% month-over-month and ended at 3,200.23 points on September 11.

On November 17, China took its first step towards opening up its stock market to foreign investment with the Shanghai-Hong Kong Stock Connect program.