Best and Worst Performing DJ U.S. Industry IndexesRichard Shaw • Aug. 3, 2010
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Yesterday, 9:43 AM
- Crude oil prices sprint higher as Saudi Arabia is said to have cut supply last month, according to a source familiar with the country’s oil policy.
- The Saudis cut supply by 328K bbl/day to 9.36M bbl/day in September, from 9.69M in August, according to the source; total Saudi output in September was 9.7M bbl/day, up from 9.6M in August.
- WTI +1% to $81.30/bbl, Brent +1.2% to $85.77.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, ERY, DIG, BNO, DTO, DBO, DUG, IYE, CRUD, USL, UWTI, PXJ, FENY, DNO, DWTI, RYE, FXN, SZO, OLO, DDG, OLEM, TWTI
Sat, Oct. 18, 8:25 AM
- A little discussed reason the stock market may have hit bottom and started to recover: The realization that the lowest oil prices in four years will provide a stimulus of more than $1T to global economies, according to Citigroup.
- “A reduction in oil prices also results in a reduction in prices across commodities, starting with natural gas, but also including copper, steel and agriculture,” says Ed Morse, the bank's head of global commodities research.
- U.S. motorists on average are enjoying the cheapest gasoline since Feb. 2011, and they are spending ~$230M/day less at the pump than on July 4, AAA says.
- Alas, some big banks say the collapse in oil is nearly over, but much will depend on whether OPEC supports the price by cutting production, as is the norm, or protects its market share by keeping production steady.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, ERY, XOP, DIG, BNO, UGA, DTO, DBO, DUG, IYE, IEO, CRUD, PXE, USL, UWTI, PXJ, FENY, DNO, DWTI, RYE, FXN, SZO, OLO, DDG, OLEM, TWTI
Fri, Oct. 17, 10:17 AM
- Oil services (OIH +4%) stocks rip higher at the open following a strong earnings report from Schlumberger (SLB +7.4%) and as oil prices stabilize.
- Tumbling crude prices haven’t shaken the faith of at least two of the top providers of drilling and production services: SLB CEO Paal Kibsgaard describes the drop as “fear of short-term oversupply” and says the company is not changing a long-term view that its earnings will almost double from last year’s level by 2017, while Baker Hughes (BHI +4.7%) CEO Martin Craighead says his company's customers don't believe crude prices will stay low.
- HAL +5.5%, SPN +5.2%, WFT +5.1%, CAM +2.1%, NOV +2%, FTI +1.8%, DRQ +1.4%.
Thu, Oct. 16, 10:58 AM
- Baker Hughes (BHI -10.2%) CEO Martin Craighead says during this morning's earnings conference call that oil prices below $75/bbl for a few months may cause energy companies to pull back spending on exploration and production.
- But BHI customers don’t believe oil prices will stay low, the CEO says, adding that “the returns are still quite attractive... right now, it’s full steam ahead.”
- Craighead says BHI is on pace to deliver solid results in Q4, deepwater projects are moving forward, and customers spending should remain stable.
- T. Boone Pickens, among others, have said $80 U.S. oil for a quarter would cause E&P companies to reassess; West Texas crude fell below $80 this morning for the first time since June 2012, and now trades at ~$81.
- Schlumberger (SLB -0.6%), the no. 1 supplier of oilfield services, is scheduled to release quarterly results after today's close.
- Earlier: Baker Hughes misses estimates on weaker Gulf of Mexico drilling activity.
- ETFs: USO, OIL, UCO, OIH, SCO, BNO, DTO, DBO, CRUD, USL, UWTI, DNO, DWTI, SZO, OLO, TWTI, OLEM
Thu, Oct. 16, 7:55 AM
- Baker Hughes (NYSE:BHI) -10.8% premarket after Q3 earnings rose 10% Y/Y but missed estimates, as political tensions in Libya and Iraq plus a sharp fall in drilling activity in the Gulf of Mexico weighed on margins.
- Q3 pre-tax profit margins in its operations in Europe, Africa and the Russia Caspian region fell to 8% from 17% in the year-ago quarter.
- Revenue of the North American segment, BHI's largest geographic business by revenue, rose 11% to $3.2B, and climbed 6% in the Middle East and Asia Pacific region, 8% in the Europe, Africa and Russia Caspian segment, and 3% in Latin America.
- Oil services stocks (NYSEARCA:OIH) to watch: HAL, SLB. SPN, NOV, CAM, FTI, DRQ.
Tue, Oct. 14, 2:43 PM
- In a bear market any news will do, and IEA earlier slashed its outlook for oil demand - with expected growth in 2015 now about 300K barrels per day less than previously estimated.
- WTI crude (NYSEARCA:USO) is down 4.2% to $82.25 per barrel, the weakest print since late-June 2012. As the country moves into heating season, heating oil (NYSEARCA:UHN) - down 3.3% today to $2.47 per gallon - is also at its lowest since the early summer of 2012. The U.S. Gasoline Fund (UGA -3%).
- Carving out a moderate advance, the major averages are getting no help from the energy sector (XLE -0.5%).
- ETFs: XLE, ERX, VDE, OIH, ERY, DIG, DUG, IYE, PXJ, FENY, RYE, FXN, DDG
Fri, Oct. 10, 6:55 PM
- Reports that Iran will follow Saudi Arabia in cutting oil prices likely will create "stiff headwinds" for companies in the oilfield services industry (NYSEARCA:OIH), according to a new report from Sterne Agee's Stephen Gengaro, though bigger players such as Schlumberger and Halliburton should hold out better than others.
- Although crude oil prices pared their big drops today, the analyst expects price weakness to continue in the short-term amid tensions within the OPEC cartel that are leading to an "apparent price war."
- While Gengaro expects minimal impact on oilfield activity for the balance of 2014, a continued slide in crude oil prices probably would hurt in 2015, especially in North America.
- Sector names finished broadly lower today: SLB -1.9%, HAL -5.2%, OII -0.5%, BHI -3.2%, SPN -3.9%, TTI -4.4%, CJES -3.5%, RES -6.2%, KEG +0.9%.
Thu, Oct. 9, 3:25 PM
- Crushed by relentless anxiety about oversupply and weakening global demand, Nymex crude oil futures closed down $1.54 at $85.76/bbl, their lowest close since Dec. 2012, while Brent crude fell below $90/bbl for the first time in more than two years.
- Including today's losses, WTI crude is down 6.2% since the start of the month and Brent has surrendered ~5%.
- In the face of surging output, a move in WTI below its 10-year average at $82 is not out of the realm of possibility, Brown Brothers Harriman says, adding that "a break of $73/barrel could send WTI toward $64, which corresponds with the 2010 low."
- Among big oil names so far today: APC -6.3%, LINE -4.6%, EPD -3.8%, DVN -3.8%, MRO -3.6%, HES -3.8%, KMI -3.7%, TOT -3.5%, STO -3.3%, RDS.A -3.1%, OXY -3%, KMP -3%, XOM -2.6%, COP -2.6%, MUR -2.6%, CVX -2.5%, BP -2.4%.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, ERY, XOP, DIG, BNO, DTO, DBO, DUG, IYE, XES, IEO, CRUD, IEZ, PXE, USL, UWTI, PXJ, FENY, DNO, DWTI, RYE, FXN, SZO, OLO, DDG, OLEM, TWTI
Thu, Oct. 9, 9:56 AM
- Global oil producers open broadly lower as oil prices continue to slide on concerns about high supplies and weak global economic growth (also): RDS.A -2.7%, STO -2.7%, TOT -2.5%, HES -2%, APC -1.7%, BP -1.6%, CVX -1.5%, COP -1%, XOM -0.8%.
- Brent prices slump to $91/bbl, approaching two-year intraday lows, and Nymex crude tumbles to $86.67/bbl to an 18-month intraday low.
- The EIA said yesterday that U.S. crude supplies rose by a more than expected 5% last week, while gasoline and distillate inventories unexpectedly grew as well.
- Barclays is cutting its oil price forecasts: It now sees U.S. crude averaging $85/bbl in Q4 and $89 in 2015, down from previous estimates of $98 in Q4 and $100 next year, and Brent crude averaging $93/bbl in Q4 and $96 in 2015, down from a respective $106 and $107 previously.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, ERY, XOP, DIG, BNO, DTO, DBO, DUG, IYE, IEO, CRUD, PXE, USL, UWTI, PXJ, FENY, DNO, DWTI, RYE, FXN, SZO, OLO, DDG, OLEM, TWTI
Tue, Sep. 16, 7:27 PM
- A new study finds that it's not the actual process of fracking that can cause water pollution; the bigger problem is faulty well construction.
- The real concern, according to an analysis published yesterday by the peer-reviewed Proceedings of the National Academy of Sciences, are leaks in the steel-and-cement casings surrounding the well bore, which let gas escape before it gets to the surface, making water undrinkable and in some cases explosive.
- "Where contamination occurs, it related strictly to well integrity," says a co-author of the study, who adds, "The answer is not to stop drilling. The fix is better executions on the construction of the well and improving well integrity."
- The study is fueling calls for stricter standards for well construction that could increase costs for energy companies.
- ETFs: XLE, ERX, VDE, OIH, ERY, FCG, XOP, DIG, GASL, DUG, IYE, XES, IEO, IEZ, GASX, PXE, PXJ, DBE, FENY, RJN, RYE, FXN, JJE, DDG, ONG, RGRE, UBN
Thu, Sep. 11, 6:54 PM
- The International Energy Agency lowers its forecast for global oil demand growth for the third month in a row, calling the recent slowdown in demand "nothing short of remarkable."
- The IEA now foresees global oil demand growth of 900K bbl/day in 2014, a decrease of 65K bbl/day vs. last month's forecast and down by 300K bbl/day since July.
- Oil demand growth in Q2 was at its lowest in two and a half years due to economic weakness in Europe and China, a trend the IEA expects will continue to hurt demand; the agency now expects oil demand to rise by 1.2M bbl/day next year, but that's 100K bbl/day less than it forecast last month.
- Saudi Arabia finally appears to be responding to the lower demand outlook, as it cut its oil output by 330K bbl/day last month and appears to have run below 7M bbl/day for the last four months, its lowest level since Sept. 2011.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, ERY, XOP, DIG, BNO, DTO, DBO, DUG, IYE, XES, IEO, CRUD, IEZ, PXE, USL, PXJ, FENY, UWTI, DWTI, DNO, RYE, FXN, SZO, OLO, DDG, OLEM, TWTI
Wed, Sep. 10, 3:28 PM
- Energy stocks, especially refiners, are taking a beating following the latest EIA inventory report that said gasoline stockpiles rose by 2.4M barrels last week, helping send U.S. crude oil futures to 16-month lows (-1.2% to $91.61/bbl) and Brent crude to 17-month lows (-1.1% to $98.02).
- The report is bearish given the large increases in refined product inventories; "even though the crude drawdown was close to expectations, it seemed to disappoint," Again Capital's John Kilduff says.
- The EIA report followed the agency’s updated demand growth report issued yesterday and this morning’s release of OPEC’s report on the oil market; both see lower demand growth this year and next.
- Oil majors are mostly lower: XOM -0.6%, CVX -1.4%, COP -0.3%, but BP (+2.9%) and RDS.A (+1%) are higher.
- Refiners are hit hard: VLO -3.6%, PSX -1.5%, MPC -1.9%, HFC -2.5%, TSO -2.9%, WNR -4.1%, CVI -1.6%, ALJ -1.8%, PBF -3.5%, DK -1.8%, CLMT -1.8%.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, ERY, XOP, DIG, BNO, UGA, DTO, DBO, DUG, IYE, IEO, CRUD, PXE, USL, PXI, PXJ, DBE, FENY, UWTI, DWTI, DNO, RJN, RYE, FXN, SZO, OLO, JJE, DDG, ONG, RGRE, OLEM, TWTI, UBN
Tue, Sep. 2, 3:25 PM
- The energy sector (XLE -1.3%) is lit up bright red this session as WTI crude oil for October delivery dives 3% to $93.04 per barrel, within a dollar or so of 2014's low price. Also headed south is natural gas, -4.1% to $3.89 per MBtu.
- USO -3%, UNG -4.5%
- The Dow (DIA -0.2%) is the weakest of the major averages, with Dow components Chevron (CVX -1.5%) and Exxon (XOM -1.1%) among the index's worst performers.
- ETFs: XLE, ERX, VDE, OIH, ERY, FCG, XOP, DIG, GASL, DUG, IYE, IEO, GASX, PXE, PXJ, FENY, RYE, FXN, DDG
Sat, Aug. 30, 6:48 PM
- "Most of the reason that banks are underearning relative to their historical norms ... is economic and not regulatory," says Richard Pzena (NYSE:PZN), who remains bullish on the TBTFs. Low interest rates, weak trading, and "government persecution" are the three factors, and - should these normalize - earnings could nearly double at Bank of America (NYSE:BAC) and Citigroup (NYSE:C), though JPMorgan's (NYSE:JPM) boost would be more modest. Goldman Sachs (NYSE:GS) is another favorite.
- Broad financial ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, SEF, IYG, FXO, FNCL, FINU, RWW, RYF, FINZ
- Another cheap sector is energy, says Pzena, and based on relative valuation against the broader market - whether price-to-book or price-to-earnings - the major integrated oil companies are selling near all-time lows.
- What the market is missing, says Pzena, is the nature of oil investment. The old days saw capital spending one year, and boosted volume the next. Projects nowadays are far larger and require several years of spending before returns roll in. "We think those big new projects are going to perform and produce decent returns." HIs favorites: BP, RDS.A, RDS.B, XOM, TOT.
- Broad energy ETFs: XLE, ERX, VDE, OIH, ERY, DIG, DUG, IYE, PXJ, FENY, RYE, FXN, DDG
Fri, Aug. 29, 9:58 AM
- The U.S. government will resume issuing oil and gas leases next year for federal lands in California after a new study found limited environmental impacts from fracking and other enhanced drilling techniques.
- The study conducted by California's Council on Science and Technology concluded the current level of fracking and other well-stimulation techniques did not seem to be poisoning water supplies or increasing earthquake risks in the state.
- The research could prove a springboard for California to increase fracking activity during the coming years.
- ETFs: XLE, ERX, VDE, OIH, ERY, XOP, DIG, DUG, IYE, IEO, PXE, PXJ, FENY, RYE, FXN, DDG
Tue, Aug. 26, 3:49 PM
- Cash earned from operations by 25 leading North American E&P companies is expected in aggregate to exceed their capital spending next year for the first time since 2008, according to a Financial Times analysis.
- Shale companies' finances have improved rapidly as a result of a shift by many away from natural gas towards more lucrative oil production and a pick-up in natural gas prices after they fell to 10-year lows in 2012.
- Analysts’ consensus forecasts now indicate that the leading shale companies’ operating cash flows in 2015 will show an excess of ~$2.4B over their capital spending vs. a shortfall of $32.2B in 2012 and $8.8B last year.
- Case in point: Chesapeake Energy (NYSE:CHK) in 2012 had capital spending almost $12B ahead of its cash flow from operations, but this year and next it is expected to be able to cover its spending almost entirely from its income.
- ETFs: XLE, ERX, VDE, OIH, ERY, FCG, XOP, DIG, GASL, DUG, IYE, IEO, GASX, PXE, PXI, PXJ, FENY, RYE, FXN, DDG
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The Market Vectors ® Oil Services ETF (OIH) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors US Listed Oil Services 25 Index (MVOIHTR). The Index is a rules-based index intended to track the overall performance of 25 of the largest U.S. listed, publicly traded oil services companies.
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