Energy Select Sector SPDR® ETF
The MPLX crude oil pipeline system
MPLX crude pipelines are connected to supply hubs, and transport crude oil to Marathon Petroleum Corporation’s, or MPC’s, refineries and third parties.
ConocoPhillips: 2015 Operational Highlights, 2016 Guidance
ConocoPhillips’s (COP) total production volume in 2015 was 1,589 Mboe/d excluding Libya. This represents a 5% year-over-year growth after adjusting for asset dispositions and downtime.
Introduction to the Permian Basin — Part 2: Geography of the Permian Basin
The Permian Basin is one of the US’s primary drivers of oil production growth. Market Realist provides an overview of this prolific hydrocarbon asset with a primer piece: “Introduction to the Permian Basin”.
What is XLE? Exploring Midstream Energy Company Exposure
Companies in the midstream sector that are included in the XLE portfolio include Kinder Morgan, Oneok, the Williams Company, and Spectra Energy.
Chevron Corporation: A must-know brief overview
Chevron Corporation is currently trading at EV-to-2014E EBITDA of 5x, has an approximately $239 billion market cap, and ~$245 billion enterprise value.
An investor’s guide to Spectra Energy Corp. and its earnings
Spectra Energy Corp. (SE), headquartered in Houston, Texas, owns and operates a large and diversified portfolio of natural gas–related assets in North America.
Overview: ONEOK Partners and its 3 operating segments
ONEOK Partners (OKS) is a master limited partnership (or MLP) engaged in gathering, processing, storing, and transporting natural gas and natural gas liquids (or NGLs) in the U.S.
XLE Outperforms USO Last Week
The Energy Select Sector SPDR ETF (XLE) fell 0.66% in the week ended September 11. XLE tracks a diverse group of 45 of the largest American energy stocks in the S&P 500 Index (SPX).
How does Occidental Petroleum compare to industry peers?
In terms of profitability, OXY has the highest profit margins amongst its peers at 24.2%. OXY also has one of the highest dividend yields at 2.85%.
Overview of US Gulf Coast 3:2:1 Crack Spread
Crack spreads usually fall when crude oil prices (USO) increase by more than product prices, or when product prices fall more than crude oil prices.
Market Paradox: Stocks Reach Record Highs Despite Headwinds
We’ll explore whether record highs signal a top for equity markets or whether there’s still some room for growth in the current bull market.
US oil rig counts continue to rally, reaching a year-to-date high
Last week, the Baker Hughes oil rig count increased from 1,423 to 1,425, reaching the highest level since 2014 began.
HollyFrontier’s Stock: Trading Below Moving Averages
Refining companies’ stock performance was affected by the abolition of the crude oil export ban in the United States.
Natural Gas’s ‘Death Cross’ and Why the Bear Market Isn’t Far
On July 5, 2017, natural gas (UNG) active futures fell 3.8% and settled at $2.84 per MMBtu (million British thermal units), their lowest level since March 8, 2017.
Is Pacific Maintaining Its Margins in a Falling Revenue Scenario?
Pacific Drilling’s (PACD) operating expense-to-revenue ratio stood at 37.5% at the end of 3Q16, similar to the previous quarter’s 37.3% and 3Q15’s 37.7%.
Must-know: Why onshore rig counts are at a 2-year high
The U.S. onshore, or land-based, rig count increased by four rigs—from 1,865 to 1,869—during the week ending September 19. Land-based rigs include 13 inland water rigs. This is the highest onshore rig count in the past two years. It’s the highest rig count since August 17, 2012. This marks the eighth increase in the past ten weeks.
What’s Analysts’ Current Read on ConocoPhillips?
On July 10, 2017, ~71% of the 24 analysts covering ConocoPhillips (COP) had “strong buy” or “buy” ratings on its stock.
Will Kinder Morgan benefit from increased 2015 capex?
In 2015, Kinder Morgan (KMI) has put in place a strong project pipeline that can increase capex by 21% to ~$4.4 billion.
What Will Arbs Think of the MRD-RRC Deal?
This transaction is a classic merger arb core position. The companies are reasonably big and liquid and the deal makes strategic sense. It’s fairly safe.
Earnings evaporate in ExxonMobil’s Downstream segment
Overall, ExxonMobil’s Downstream business produced 46% less earnings in the fourth quarter of 2014 compared to the same quarter a year ago.
Permian Basin activity: A key indicator of energy sector health
This was the seventh straight weekly decline in the Permian Basin oil rig count. Overall, the weekly US crude oil rig count was down 4%.
Why Did Sanchez’s Stock Rise after 3Q16 Earnings Release?
After Sanchez Energy’s (SN) 3Q16 earnings release on November 7, its stock rose ~2%.
The WTI-Brent crude oil discount narrows
The divergence between WTI and Brent narrowed last week, as a slowdown in Cushing offered a glimmer of hope, causing WTI to rise.
In-Depth Look: Debt Servicing Eating into Operations Cash
With large reductions in cash from operations and heavy burdens of fixed debt repayments, the ratio of debt servicing to operating cash flow rose in 2015.
Analyzing National Oilwell Varco’s Free Cash Flow
National Oilwell Varco’s cash from operating activities (or CFO) rose by more than four times in 1Q16 compared to 1Q15.
Why next quarter looks better for BHI’s international markets
In Latin America, BHI expects year-end product sales to increase. It also expects the offshore Mexico rig activity to increase.
What We Can Forecast from EQT’s Implied Volatility Trends
EQT’s (EQT) current implied volatility is ~31%. While EQT’s peer Cabot Oil and Gas (COG) has a lower implied volatility of 28.2%, Chesapeake Energy (CHK) has a higher implied volatility of 49%.
US Crude Oil above $70: Is More Upside Coming?
On May 7, US crude oil June futures rose 1.4% and settled at $70.73 per barrel—the highest closing level since November 26, 2014.
QEP Resources’ Free Cash Flow Deteriorated in 2017
For fiscal 2017, QEP Resources reported a negative FCF of -$1.4 billion, which is much higher than its negative FCF of -$544 million in 2016.
Placing Apache’s Stock Compared to Its Peers
Apache’s stock has fallen almost 20% this year. However, since October, it has remained above approximately $47 on an average.
Traders Are Tracking OPEC’s Meeting on June 22
The crude oil production from OPEC and non-OPEC producers is expected to increase by 300,000 bpd–600,000 bpd in OPEC’s upcoming meeting.
Why improvement in Libya pushed down the crude price last week
For most of the last two years, WTI crude oil has been range-bound between ~$85 per barrel and ~$110 per barrel.
Midstream Companies’ Performances: Sales and Gross Profit
In fiscal 3Q15, the gross profit of frontline midstream operator Williams Companies (WMB) fell 28.6% on a YoY basis. Williams Companies’ sales grew by 11.3%.
Broader Market Might Have Limited the Upside in Energy ETFs
US crude oil February futures rose 5.6% in the trailing week.
Why ConocoPhillips Sold Its Barnett Assets
ConocoPhillips’s (COP) Barnett assets have a relatively small contribution to its overall production. In 2016, COP’s Barnett assets produced only 11 MBoepd.
Correlations between Energy ETFs and the Broader Market’s Moves
In the seven calendar days to February 8, 2018, OIH, XOP, XLE, and AMLP fell 13.6%, 12.7%, 11.8%, and 8.2%, respectively.
Refiners’ Debt Rose Substantially in 3Q15
Marathon Petroleum’s (MPC) total debt almost doubled in 3Q15 compared to the same quarter in the previous year.
Why analysts were surprised by distillate inventories last week
It’s expected distillate production will grow by the end of 2014. Refineries have built new facilities to produce more distillates than gasoline in anticipation of strong global demand growth.
What’s Devon Energy’s Implied Volatility?
As of August 2, 2017, Devon Energy (DVN) had an implied volatility of ~40.7%, which is lower than its implied volatility of ~33.6% on July 25, 2017.
Is Natural Gas Supply and Demand Narrowing?
Natural gas production from the lower 48 states of the US increased slightly by 0.6% to 79.82 Bcf as of May 20, 2015—compared to the previous week.
Most Midstream Companies Increased Debt in 3Q15
The total debt for Williams Companies (WMB) and Energy Transfer Equity (ETE) grew by 87% and 32%, respectively, on a YoY (year-over-year) basis in fiscal 3Q15.
Rising Oil Inventories Spread Impacts Oil Prices
US commercial crude oil inventories rose by ~9.5 MMbbls (million barrels) in the week ending on February 10, 2017—compared to the previous week.
Why cold weather warms natural gas investors
Last week, natural gas prices didn’t increase despite forecasts for cooler weather. The forecast called for weather that would be cooler, but not cold enough to cause freezing temperatures.
Continental Resources Stock Fell 3% after Its 1Q18 Earnings
At the end of 1Q18, Continental Resources had total debt of ~$6.2 billion, which is close to the company’s short-term goal of $6.0 billion.
Which Energy Stocks Are Leading the Rise in the Energy Sector?
Stocks that are leading the rise in the Energy Select Sector SPDR Fund this week include Chesapeake Energy, Andeavor, and FMC Technologies.
Analyzing Rowan’s Rig Scrapping and Stacking Activity in 3Q15
Offshore drilling (XLE) (IYE) is a capital-intensive industry requiring a large amount of money to keep rigs active and well-maintained.
Why Kinder Morgan’s 2Q15 Earnings per Share Estimate Is Low Again
Kinder Morgan (KMI) beat analysts’ 1Q15 earnings per share estimate, but Wall Street lowered its 2Q15 estimate to $0.191 compared to $0.216 in 1Q15. That’s a decrease of 11.6%.
Marcellus Shale: Why it’s key for US natural gas
Natural gas prices in the northeastern US have increasingly been below the Henry Hub price. This is primarily because of the Northeast’s increased access to Marcellus natural gas production.
Where Will Commodities Head during Trump’s Term?
Donald Trump’s policies are aimed at strengthening job markets in the United States (VFINX) (IVV).
ExxonMobil’s rising investment cash flow isn’t necessarily good
In this part, we’ll discuss XOM’s cash flow from investing activities (or CFI). We say “from,” but items under this type of cash flow are usually negative.
Forecasting Whiting Petroleum’s Stock Price Range for Next Week
Whiting Petroleum (WLL) has an implied volatility of ~68.16%, which is ~12% higher than its 15-day average of ~61%.
Why the Gloomy GDP Estimate Is Not Cause for Panic
There are several reasons why the gloomy GDP estimate is not cause for panic. The slowdown in GDP growth seems to be a temporary setback.
Macro Events That Could Influence Markets This Week
The last three trading sessions in May are likely to be influenced by geopolitical issues rather than economic data.
Hess’s Key Management Objectives Investors Need to Know
Hess’s (HES) key management objectives include taking several steps to counter lower commodity prices. These include capital and cost reductions.
Why ION Geophysical Has Outperformed the Industry Year-to-Date
ION Geophysical’s (IO) year-to-date returns as of May 11 were 37.5%.
4 must-know facts about rising inflation and your portfolio
Recent readings have shown that inflation has stabilized, which is a good thing, but signs of an imminent acceleration in inflation are still scant.
Phasing out of financial repression will affect your investments
The United States seems to be in the process of departing a regime of financial repression, i.e. one where a government takes measures to channel funds into its own debt.
Why the Permian Basin is the key indicator for oil rig counts
According to the U.S. Energy Information Administration (or EIA), the Permian Basin is the largest crude oil–producing region in the US.
What Drove Whiting Petroleum Stock in 2017?
Whiting Petroleum (WLL) stock rose 5.3% in the week ending December 29 from the previous week. However, the stock fell ~47.6% by the end of 2017.
Key Analysis of Chevron’s Fiscal 3Q15 Earnings
Chevron (CVX) announced its third quarter earnings on October 30, 2015. Chevron saw new positions in 870 institutional investors’ portfolios in fiscal 2Q15.
Why the latest oil inventory report affects crude prices
Every week, the U.S. Energy Information Administration (or EIA) reports figures on crude inventories, or the amount of crude oil stored in facilities across the U.S.
Sunoco Logistics’ 4Q14 Earnings Fell Short of Estimates
In 4Q14, Sunoco’s adjusted revenues fell short of estimates by ~19%.
Must-know: Why US rigs lost the most in 11 months
The U.S. total rig count decreased by 17 rigs—from 1,913 to 1,896—during the week ending August 22. This marked the first rig count decline in the past five weeks. The decline was also the largest since late September 2013.
WTI–Brent Spread Continues to Diverge: Who Gains and Who loses?
WTI (West Texas Intermediate) crude oil’s discount to Brent crude oil widened in the week ended August 14 over the previous week.
Southwestern Energy’s 2Q17 Revenue Expectations
For 2Q17, analysts expect Southwestern Energy to report revenues of ~$814 million. On a YoY basis, its 2Q17 revenue expectations are ~56% higher.
ConocoPhillips Stock Outperforms Crude Oil
The price of natural gas (UNG) rose ~5% last week. It rose from $2.92 per mmBtu (million British thermal units) to $3.07 per mmBtu. ConocoPhillips’s production volume mix contains ~40% natural gas.
Snapshot: Valuing Williams Companies compared to its peers
Enterprise Products Partners (EPD) is the largest company by market capitalization and enterprise value, or EV, among its closest peers. By market cap, Williams Companies (WMB) follows next.
Distillate inventories continued to decline
Distillate demand and stock levels drive crude demand and crude prices. As a result, energy investors watch distillate inventories closely.
Investors respond differently to upstream companies’ capex plans
In this environment of crude oil prices declining sharply and staying low, investors continue to favor stocks that are increasing investments.
Must-know: Cabot Oil & Gas’ market performance
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 Dragged Down MLPs Last Week?
MLP sluggishness continued last week. The Alerian MLP Index, which tracks the performance of 50 energy infrastructure MLPs, ended the week 4.4% lower.
Introducing Denbury’s Big Losses in 4Q16
Denbury reported a better-than-expected loss of ~$6.5 million, as analysts were expecting an even bigger loss of ~$11.4 million.
Why Chevron is cutting spending on some projects
Chevron has cut spending on the Kitimat liquefied natural gas project (or LNG) in Canada due to falling crude prices.
Why inventory figures buoyed crude oil prices
On February 5, the DOE reported an increase in crude oil inventories of 0.44 million barrels—much lower than analysts’ expectations of a build of 2.27 million barrels.
What Analysts Are Saying Now about Southwestern Energy
As of May 2, 40 analysts have given recommendations on SWN, including five “strong buys,” five “buys,” 27 “holds,” two “sells,” and one “strong sell.”
Assessing Analysts’ 12-Month Estimates for Downstream Companies
Among downstream companies, Alon USA Energy (ALJ) was trading 1% below its 20-day moving average on March 4, 2016, after rising above this moving average in the previous day’s trade.
Natural Gas Prices: Is a Reversal Possible?
On July 19, 2017, natural gas August futures closed at $3.07 per MMBtu (million British thermal units), 0.7% below their previous settling price.
How Energy Commodities Performed from June 18–20
Energy stocks are rising this week. The Energy Select Sector SPDR ETF (XLE) has risen 1.2% from June 18–20.
EOG Resources’ Stock Movement Trends
We’ll now turn to EOG Resources (EOG)—our third-largest oil and gas producer, based on the fiscal 2017 data.
Energy Transfer Stock Is at a 52-Week Low
Energy Transfer (ET) stock continues to trade weak. The stock hit a new 52-week low of $12.75 on December 18.
Analyst Recommendations for Total: Majority Says ‘Buy’
Five of the seven firms covering Total (TOT) have rated it a “buy” or “outperform.”
Must-know: Insight into ExxonMobil’s earnings
A large portion of ExxonMobil’s earnings come from “non-operating” sources. This reflects the sheer scope of the company’s operations.
Is Oil Boosting Equity Indexes?
Between September 7 and 14, US equity indexes rose.
Why US oil rigs have been trending downward since mid-year
Oil rig counts decreased last week, down ~4% since June Last week, the Baker Hughes oil rig count decreased from 1,367 to 1,361. Oil rig counts have been on a slight downward trend since mid-year. Rigs drilling for oil peaked this year in June, at 1,413, but have since fallen about 4%. Though the drop […]
Does a falling US rig count signal a trend?
Rig counts tell us how many rigs are actively drilling for oil and gas. They can be an indication of oil and gas producers’ confidence.
Natural Gas Prices and Gas Rigs Move in the Same Direction
On Friday, June 5, Baker Hughes released the weekly natural gas rig count report. As expected, natural gas rigs fell by three to 222 for the week ending June 5.
Energy ETFs Could Be More Aligned to Equity Markets than Oil
In the trailing week, OIH rose 0.5%—the only energy ETF on our list that closed in the green. US crude oil futures rose 2.6%.
How Energy Commodities Are Performing This Week
Crude oil (USO) prices rose from last week’s close of $68.58 per barrel to $70.53 per barrel on June 26—an increase of ~3%.
Why Oil Might Be Troubling Wall Street
On November 15–21, US equity indexes had the following correlations with US crude oil January futures.
What Happened to ConocoPhillips Stock Last Week?
Last week (ended June 2, 2017), crude oil prices continued their weekly declining trend, falling from $49.80 per barrel to $47.66 per barrel.
Will ONEOK Continue to Outperform Its Peers?
ONEOK is trading 4% above its 50-day moving average and 8% above its 200-day moving average.
Crude Oil Prices Rise for the Second Day, Led by EIA Inventory Data
The unexpected fall in crude oil inventory supported crude oil prices. The fall in US imports might have led to the fall in the US oil inventory.
Phillips 66’s Midstream segment volumes are on track
Midstream’s earnings recovery in year-to-date 2014 was aided by higher natural gas liquids (NGL) prices.
US Crude Oil Rig Count: Turning Point for the Bear Market?
Baker Hughes (BHI) reported that the US crude oil rig count rose by 11 to 758 on June 16–23, 2017. Rigs rose 1.5% week-over-week and 129.8% year-over-year.
Behind the Improving Cost Side of Ocean Rig
Ocean Rig (ORIG) recorded general and administrative expenses of $26.9 million in 2Q16, as compared to $19 million in 1Q16.
Will the MRD-RRC Deal Get Competitive?
Range Resources’ (RRC) offer of $15.75 per share was a 17% premium to Memorial Resource Development’s (MRD) price before the deal was announced.
Waiting for the Numbers: Valero’s 4Q15 Earnings and Refining Margin Trend
In 3Q15, Valero noted a rise in its gross refining margin by $2.6 per barrel to $14.4 per barrel, compared to what we saw in 3Q14.
Behind the scenes of the Halliburton-Baker Hughes merger
On October 13, Halliburton proposed to acquire Baker Hughes’ shares without prior notice. After receiving BHI’s counter proposal, Halliburton refused to increase its first value proposal.
Why Are Oil and Equity Indexes Diverging?
Last week, the S&P Mid-Cap 400 (IVOO), the S&P 500 (SPY), and the Dow Jones Industrial Average (DIA) fell 5.2%, 4.6%, and 4.5%, respectively.
Must-know: Petroleum doing well, but potash is slow
Total petroleum production increased by 4% in fiscal year 2014 (or FY14). However, the highlight was the increase in liquids production. It was supported by a 73% increase in Onshore U.S. liquid volumes and nearly doubled production at Atlantis. This is important to note because liquid volumes are more profitable.