Seeking Alpha
Recommended for you:
Growth at reasonable price, long/short equity, foreign companies, master limited partnerships
Profile| Send Message|
( followers)  

Crude oil prices exhibited considerable volatility over the past week. WTI crude dropped over all on Monday, although there were a few spikes that pushed the price back up above its opening price. This reversed itself on Tuesday, although once again there were numerous sharp spikes and corrections. The upward trend continued on Wednesday until midday, when there was a sharp fall that drove prices down. This was immediately followed by a rally that sent crude oil to its highest price of the week up until that point. Thursday saw prices falling sharply. Friday saw them shoot up to the week's highs. Overall, crude was up over the week, but it was very much a traders' market. The overall market, as measured by the S&P 500 index, was much less volatile. Monday and Tuesday were relatively flat, although the fiscal cliff worries resumed late in the day on Tuesday and the index began a downward move. This continued until midday Friday, when optimism that Congress would reach a resolution to the cliff kicked in and the index began to rally. It was not enough to erase the losses from earlier in the week, however, and overall the market closed the week at a loss. As usual, this market action had different effects on the six foreign integrated oil and gas companies that are tracked in this weekly series.

Statoil (NYSE:STO) opened at $23.99 on November 12, 2012. The stock closed at $23.58 in after hours trading on November 16, 2012. Stockholders in the company thus suffered a loss of $0.41 per ADR share or 1.71% over the week. Statoil opened at $25.74 on October 22, 2012. This gives the stock a trailing four-week loss of $2.16 or 8.39%.

STO 5-Day Chart

(click to enlarge)

Source: Fidelity Investments

STO 4-Week Chart

(click to enlarge)

Source: Fidelity Investments

BP plc (NYSE:BP) opened the week at $41.11. The stock closed at $40.10 in after hours trading on November 16. BP's stockholders thus suffered a loss of $1.01 or 2.46% over the week. BP opened at $43.35 on October 22, 2012. Thus, shareholders of BP stock suffered a loss of $3.25 or 7.50% over the trailing four-week period. BP stock went ex-dividend on November 7. Shareholders as of the previous day will receive a dividend payment of $0.54. This effectively reduces the trailing four-week loss to $2.71 or 6.25%. BP resolved its criminal charges with the U.S. Department of Justice regarding 2010's Macondo oil spill on Friday with a $4 billion settlement which will be paid out over the course of five years. Additionally, the company resolved all securities charges that were brought by the Securities and Exchange Commission with a $525 settlement that will be paid over the course of three years. While this does not resolve all the civil claims that the company is facing, it should go a long way to remove some of the uncertainty that still hangs over the stock due to this disaster.

BP 5-Day Chart

(click to enlarge)

Source: Fidelity Investments

BP 4-Week Chart

(click to enlarge)

Source: Fidelity Investments

Total S.A. (NYSE:TOT) opened on November 12 at $48.19 per share. The stock closed at $47.48 in after hours trading on November 16. This gives ADR shareholders a loss of $0.71 or 1.47% for the week. Total opened on October 22 at $51.71. Thus, stockholders have suffered a loss of $4.23 or 8.18% over the past four weeks. Total is quite well positioned to grow its free cash flow and production going forward and so this fall in the share price could represent an entry point for a patient investor.

TOT 5-Day Chart

(click to enlarge)

Source: Fidelity Investments

TOT 4-Week Chart

(click to enlarge)

Source: Fidelity Investments

Suncor (NYSE:SU) opened on November 12 at $33.33. The stock closed at $31.47 in after hours trading on November 16. This gives the stock a loss of $1.86 or 5.58% for the week. The stock opened on October 22, 2012 at $33.69. Thus, Suncor stock has delivered losses to its shareholders of $2.22 or 6.59% over the trailing four week period.

SU 5-Day Chart

(click to enlarge)

Source: Fidelity Investments

SU 4-Week Chart

(click to enlarge)

Source: Fidelity Investments

Royal Dutch Shell (NYSE:RDS.A) opened at $68.00 on November 12, 2012. The stock closed at $65.03 in after hours trading on Friday, November 16. Shareholders thus suffered a loss of $2.97 or 4.37% for the week. The stock opened at $68.87 on October 22, 2012. Shareholders thus suffered a loss of $3.84 per share or 5.58% over the trailing four-week period. Royal Dutch Shell went ex-dividend on November 14. Shareholders as of market close on the previous day will receive a dividend of $0.86 per ADR share. This effectively decreases the loss over the past week to $2.11 or 3.10%. This dividend also effectively reduces the trailing four-week loss to $2.98 or 4.33%. Technical indicators show that the stock could have entered oversold territory. This could position it for a bounce-back. Royal Dutch Shell is also making a big bet on liquefied natural gas. Unlike natural gas in North America, gas demand worldwide remains strong and prices are substantially higher in Europe and Asia. LNG offers the company an easy way to transport gas from areas such as North America and Australia where there exists high supply to areas such as Asia, where demand remains strong (and growing).

RDS.A 5-Day Chart

(click to enlarge)

Source: Fidelity Investments

RDS.A 4-Week Chart

(click to enlarge)

Source: Fidelity Investments

Eni (NYSE:E) opened at $44.53 on November 12. The stock closed at $43.89 in after hours trading on Friday, November 16. Shareholders thus suffered a loss of $0.64 or 1.44% for the week. The stock opened at $46.16 on October 22, 2012. Shareholders thus profited suffered a loss of $2.27 per share or 4.92% over the trailing four-week period. Eni benefited over the latest quarter due to Libyan production coming back online. This makes Eni one of the few large oil and gas companies that saw higher year over year profits this quarter.

E 5-Day Chart

(click to enlarge)

Source: Fidelity Investments

E 4-Week Chart

(click to enlarge)

Source: Fidelity Investments

All six of these stocks delivered losses to investors, despite the fact that crude oil prices rose over the week. The best performer was Eni, although Total was not far behind. In this case, though, the best performer is merely the stock that delivered the smallest loss. The worst performer was Canada's Suncor Energy by a very large margin. Royal Dutch Shell was the best performer over the trailing four-week period once the impact of the dividend on returns is considered. Eni was not too far behind Royal Dutch Shell, however. The worst performer over the trailing four-week period was Statoil with Total in a very close second place. Both of these two companies have promising growth potential. In Statoil's case, the company is not located in a country that is suffering from the same debt problems as the European Union and the United States (although the firm does have significant exposure to both regions).

Source: Weekly Performance Update On 6 Foreign Integrated Oil And Gas Companies