Mon, Apr. 18, 10:25 AM
- The energy sector (XLE +0.1%) pokes into the green as crude oil prices pare earlier losses even after the collapse of the Doha meeting, and it's a mixed bag among the top global oil companies in early trading: XOM +0.1%, CVX +0.3%, RDS.A -0.9%, BP -0.3%, TOT -0.4%.
- Kuwait may have achieved what Doha failed to do, at least in the short term, as a labor strike that began Sunday has cut the country's production by 60%, shuttering 1.7M bbl/day, slightly more than H1's global surplus that caused prices drop to a 12-year low in January.
- Some oil analysts say the lack of a Doha deal is better for oil prices in the long run now that the rebalancing process of supply and demand can continue to its natural conclusion.
- Other noteworthy names: KMI -0.1%, CHK -4%, MRO -1.4%, COP +0.1%, SLB +0.2%, HAL +0.2%, BHI -0.7%, OXY +0.5%, APC -0.1%, HES +0.6%, ENB +0.8%, ETP -0.4%, EPD +1.5%.
- ETFs: XLE, VDE, ERX, OIH, XOP, FCG, ERY, GASL, DIG, DUG, BGR, XES, IYE, IEO, FENY, IEZ, PXE, PXI, FIF, PXJ, RYE, NDP, GUSH, PSCE, DRIP, DDG, FXN
- Now read No deal! Our 'enfant terrible' Saudi Arabia did it again
Mon, Jan. 11, 4:38 AM
- JPM strategists note that earnings expectations have been managed aggressively going into earnings season. Four months ago, the "hurdle rate" for S&P 500 stocks was +5% Y/Y; now it's -4% Y/Y. “If this were to materialize, it would be the weakest quarter for EPS delivery so far in the upcycle.”
- Energy sector earnings consensus signals only single-digit losses, while oil prices are 36% below the 21015 average.
- Sees euro-zone earnings outperforming U.S. for second year running.
- Overall, firm says risk/reward for stocks is poor. Use bounces as selling opportunities.
- ETFs: SPY, QQQ, DIA, SH, XLE, SSO, SDS, VOO, IVV, VDE, UPRO, PSQ, SPXU, ERX, TQQQ, OIH, SPXL, SPLV, XOP, RSP, SPXS, QID, PRF, SQQQ, ERY, FCG, QLD, CRF, DOG, DIG, GASL, DXD, PBW, RWL, UDOW, EPS, DUG, SDOW, BGR, XES, IYE, VV, USA, IEO, SCHX, DDM, VFINX, IEZ, QCLN, FENY, PXE, IWB, OEF, PXI, ZF, FIF, PXJ, SPHB, MGC, SPHQ, PSCE, BXUB, NDP, RYE, QQEW, FEX, QQQE, VONE, XLG, JKD, FXN, EEH, SPLX, PUW, SFLA, BXUC, EQL, QQXT, DDG, ROLA, IWL, SPUU, ONEK, HECO, EQWL, EWRI, LGLV, ERW, FWDD, EQAL, ZLRG, FMK, CFA, SYE, CFO, LLSP, UDPIX, SBUS, USWD, USSD, DRIP, GUSH, OTPIX, QUS, RYARX, GSLC
Dec. 18, 2015, 7:44 AM
- "You can be pretty much sure we’re short all of the major leveraged oil companies," Jim Chanos tells CNBC. The stocks, he says, have held up better than oil thanks to the companies' commitment to paying dividends, "but in effect, they're borrowing to pay their dividend."
- It's no secret Chanos has been short Cheniere Energy (NYSEMKT:LNG), and it sounds like he remains so.
- As for the price of oil, he's got no price target, but he's a bear. If he were OPEC, he says, he'd be pumping out as much oil as possible today because it might be worth even less in 15 years.
- Famously short SolarCity (NASDAQ:SCTY), he's not fazed by this week's big tax-break related gains, and wishes he could borrow more shares. "We're not bearish on solar. We’re bearish on the guys who are knocking on doors, trying to put solar panels on your house."
- ETFs: XLE, VDE, ERX, OIH, XOP, ERY, DIG, DUG, BGR, IYE, IEO, FENY, PXE, PXJ, FIF, PSCE, NDP, RYE, FXN, DDG, GUSH, DRIP
- XLE -1.6%, SCTY -3% premarket
Dec. 10, 2015, 5:02 PM
- "With few hedges for 2016, half of [the] U.S. energy industry will be bankrupt in six months with prices at these levels," tweets legendary energy trader John Arnold. "OPEC definitely smells blood."
- Asked for more details by CNBC, Arnold responds: "Wall Street largely understands the drop in revenue for 2016 for many companies, but I do not think Main Street does."
- Previously: Oil dives below $40 as OPEC holds production steady (Dec. 4)
- ETFs: XLE, VDE, ERX, OIH, XOP, ERY, FCG, DIG, GASL, DUG, BGR, XES, IYE, IEO, IEZ, FENY, PXE, FIF, PXJ, PSCE, NDP, RYE, FXN, DDG, DRIP, GUSH, USO, OIL, UCO, UWTI, SCO, BNO, DBO, DWTI, DTO, UGA, USL, DNO, UHN, OLO, SZO, OLEM
Dec. 7, 2015, 10:30 AM
- That the price of oil has been in a bear market isn't news, but the $40-$41 range has proven to be pretty effective support. That level was breached on Friday after OPEC couldn't agree on production cuts, and black gold today has a $38 handle for the first time since the depths of the financial crisis.
- WTI crude is lower by 4.1% on the session to $38.35.
- Natural gas is down 3.3% today, and also at multi-year lows.
- The Energy Sector SPDR (XLE -4.4%), is dragging the Dow and S&P each lower by 0.7%.
- ETFs: XLE, VDE, ERX, OIH, XOP, ERY, DIG, DUG, BGR, XES, IYE, IEO, IEZ, FENY, PXE, PXJ, FIF, PSCE, NDP, RYE, FXN, DDG, DRIP, GUSH
Sep. 15, 2015, 6:56 PM
- The borrowing party is about to end for smaller and more debt-laden oil producers, WSJ reports, with drillers bracing for cuts to their credit lines next month as banks re-evaluate how much energy companies’ oil and gas properties are worth and the low price of oil catches up to the producers.
- Some smaller companies already are negotiating with their lenders, dumping assets at low prices and delaying payments to vendors.
- "With eight bankruptcies already announced this year, weaker producers could live or die by the whims of capital providers," and banks will reduce borrowing bases by as much as 15%, according to Citi analysts, which WSJ says would dry up ~$10B of liquidity.
- More distress likely is in store for many companies because the hedges they purchased as protection against low oil prices are increasingly expiring.
- ETFs: XLE, VDE, ERX, OIH, XOP, ERY, FCG, DIG, GASL, DUG, BGR, XES, IYE, IEO, IEZ, FENY, PXE, FIF, PXJ, PSCE, NDP, RYE, FXN, DDG
Aug. 2, 2015, 8:41 AM
- President Obama will unveil the final version of his plan to tackle greenhouse gases from coal-fired power plants on Monday, in what he calls the nation's most important step to combat climate change.
- The revised Clean Power Plan will seek to slash carbon emissions from the power sector 32% from 2005 levels in 2030, and will require each state to submit a plan next year that spells out how it will meet the goal assigned to it.
- ETFs: XLE, VDE, ERX, OIH, XOP, ERY, FCG, DIG, GASL, PBW, DUG, BGR, XES, IYE, IEO, IEZ, QCLN, FENY, PXE, PXI, FIF, PXJ, PSCE, NDP, RYE, GRN, FXN, PUW, DDG, HECO, DRIP, GUSH
May 20, 2015, 2:41 PM
- Oil and gas companies so far have largely weathered the sharp drop in oil prices with minimal carnage, but Moody's predicts in a new report that the carnage could be coming.
- Moody’s predicts the default rate for oil and gas companies with lower credit ratings may increase to 7.4% by March 2016 from 2.7%; even if oil prices recover gradually to $70-$75/bbl next year, the weaker oil and gas firms will be positioned for a “much greater risk of default," the report says.
- Moody's expects independent E&P companies to have the most trouble, as they are typically smaller in size and more reliant on outsize capital spending to replenish their reserves, while refiners are better positioned to survive oil price volatility because their business is not directly tied to the price of oil.
- Oil and gas companies already have suffered a drop in their credit ratings: As of May 1, the group accounted for 14.8% of all the companies covered by Moody’s with credit ratings of B3 or lower, up from 8% the prior year.
- ETFs: XLE, VDE, ERX, OIH, XOP, ERY, FCG, DIG, GASL, DUG, BGR, XES, IYE, IEO, IEZ, FENY, PXE, PXJ, FIF, PSCE, NDP, RYE, FXN, DDG
Apr. 8, 2015, 3:48 AM
- European energy shares are having a party in early trading following confirmation of Shell's blockbuster deal to buy BG Group for $70B.
- Tullow Oil (OTCPK:TUWLF) soars 11.5%, BP (NYSE:BP) is +4.2%, Repsol (OTCQX:REPYY) +2.2%, Total (NYSE:TOT) +1.3% and Eni (NYSE:E) +1.5%. The STOXX Europe 600 Oil & Gas index is +5.4%.
- "The deal is done on a net asset value basis, and the good price tag is set to trigger some re-rating across the whole sector," says a Paris-based trader.
- ETFs: XLE, ERX, VDE, OIH, XOP, ERY, FCG, DIG, GASL, DUG, IYE, XES, IEO, IXC, IEZ, PXE, IPW, PXI, FENY, PXJ, PSCE, RYE, FXN, GNAT, DDG, FILL
Feb. 11, 2015, 3:39 PM
- For years deep-value investor Richard Pzena (PZN -0.6%) has been preaching of the opportunities in financial services and mature tech, and now he's adding energy to that list.
- Not ready to hit the "buy" button yet (though he does own and is comfortable with positions in major integrated oils), Pzena and crew are spending their time digging deep into companies to understand the nuances of their business models and financial strength.
- "Our investment team is working overtime researching the full range of companies in the industry including the major integrateds, exploration and production companies, servicers and drillers. We believe we have time on our side as our long-term view of oil prices of $60 to $80 per barrel is not out of line with consensus."
- Pzena Investment Management earnings call transcript
- ETFs: XLE, ERX, VDE, OIH, XOP, ERY, FCG, DIG, PBW, GASL, DUG, IYE, XES, IEO, QCLN, IEZ, PXE, PXI, FENY, PXJ, PSCE, RYE, PUW, FXN, DDG, HECO
Feb. 11, 2015, 1:12 PM
- Oil prices have bounced nicely in February, but investors have been pouring money into energy-related ETFs for the last three months, writes Chris Dieterich in Barron's.
- Ned Davis' Neil Leeson says money first started being put to work in funds like the XLE and IYE in October, with flows picking up as prices fell even further in December. In 2015 - of the 10 S&P sectors - energy has taken in the most, just over $6B.
- For the technicians from Leeson: "Trend improvement, oversold, relative strength improvement, undervaluation and positive flows all at once is a rare event. The last time all the stars aligned like this was at the market low in 2009. Prior to that, you would have to go back to 2003."
- ETFs: XLE, ERX, VDE, OIH, XOP, ERY, DIG, DUG, IYE, XES, IEO, IEZ, PXE, FENY, PXJ, PSCE, RYE, FXN, DDG
Jan. 5, 2015, 12:18 PM
- Energy stocks severely underperform the broader market, with the sector -4.2% vs. the S&P 500's -1.4%, as U.S. oil prices briefly slip below $50/bbl for the first time since April 2009; Nymex crude recently was -4.4% at $50.37, while Brent crude -5.9% at $53.08.
- Among the day's biggest losers: DNR -9%, RIG -7.6%, NBR -4.8%, CHK -5.9%, SDRL -9.1%, SD -12.3%, NOV -5.9%, PSX -6.2%, APA -5.9%, DVN -4.4%, EOG -6%, SU -5.2%, OXY -4.2%, APC -8.7%, PWE -9%, ECA -5.5%, MRO -5.3%.
- Global oil majors, which have been seen as less vulnerable to falling oil prices, are posting big losses: XOM -2.7%, COP -4.5%, CVX -3.8%, BP -5.8%, RDS.A -4.6%, TOT -6.5%.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, XOP, ERY, FCG, DIG, PBW, BNO, GASL, DTO, DBO, DUG, IYE, XES, IEO, QCLN, IEZ, UWTI, PXE, USL, PXI, FENY, DWTI, PXJ, DNO, PSCE, RYE, SZO, PUW, FXN, OLO, DDG, HECO, TWTI, OLEM
Nov. 28, 2014, 12:52 PM
- "OPEC, like Rockefeller, ultimately damned itself," writes Wolfe Research's Paul Sankey. He doesn't see oil demand ratcheting upwards because of the drop in oil prices; instead, he says, the market will only clear at the point of U.S. supply growth destruction.
- This could take months and a price of around $50 per barrel ... "And then we squeeze radically higher. As a result, the world accelerates its move away from oil."
- "This is going to be volatile, and we can't understand how that helps the Saudis. Volatility sells Teslas."
- WTI crude (NYSEARCA:USO) tried bouncing earlier, but is now lower by 8.5% at $67.43 per barrel. The Energy Select SPDR (XLE -6.6%) is also set to close today's shortened session on the lows.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, XOP, ERY, DIG, BNO, UGA, DTO, DBO, DUG, IYE, XES, IEO, CRUD, IEZ, UWTI, PXE, USL, FENY, PXJ, DWTI, DBE, DNO, PSCE, RJN, RYE, SZO, FXN, OLO, JJE, DDG, ONG, RGRE, OLEM, TWTI, UBN
Nov. 28, 2014, 7:25 AM
- OPEC yesterday decided to hold production numbers despite the bear market in oil. WTI crude is down about $5 per barrel to $69.
- A premarket look at the top 10 holdings of the XLE: Exxon Mobil (NYSE:XOM) -4.1%, Chevron (NYSE:CVX) -4.1%, Schlumberger (NYSE:SLB) -4.6%, ConocoPhillips (NYSE:COP) -4.4%, EOG Resources (NYSE:EOG) -4.3%, Pioneer Natural Resources (NYSE:PXD) -4.8%, Occidental Petroleum (NYSE:OXY) -4.3%, Haliburton (NYSE:HAL) -4.7%, Anadarko Petroleum (NYSE:APC) -5%, Williams Companies (NYSE:WMB) -1.6%.
- ETFs: ERX, VDE, OIH, XOP, ERY, FCG, DIG, PBW, GASL, DUG, IYE, XES, IEO, QCLN, IEZ, PXE, PXI, FENY, PXJ, PSCE, RYE, PUW, FXN, DDG, HECO
Nov. 4, 2014, 1:10 PM
- An big outlier to the downside in today's session is the energy sector (XLE -2.4%) as crude oil tumbles another 2.5% to a 3-year low of $76.80 per barrel, and brings heating oil and gasoline along with it.
- As comparison, the S&P 500 is down just 0.4%.
- Now off 21% from its all-time closing high on June 23, the XLE is down 5% YTD, making it the only ETF tracking the 10 benchmark S&P sectors to be in the red in 2014 (the S&P 500 is up 8.4%).
- ETFs: XLE, ERX, VDE, OIH, ERY, XOP, DIG, DUG, XES, IYE, IEO, IEZ, PXE, FENY, PXJ, PSCE, RYE, FXN, DDG
May 20, 2014, 10:27 AM
- Twenty-seven year old Mark Hiduke just raised $100M for his three-week old company, but he's a Texas oilman, not a tech entrepreneur. His Dallas-based PetroCore, LLC received the commitment from a local P-E firm to buy land and drill shale wells.
- “These guys are going to be the poster children of self-made oil and gas tycoons,” says Nathen McEown, a 33-year-old accountant who organizes networking dinners. “Or they could be the poster children of how too much money is chasing deals.”
- Known as "the great crew change," millennials - who for decades have spurned energy for other careers - are flocking back into an industry where 71% of the workforce is aged 50 or older. The University of Oklahoma's energy management program has sextupled in size to 600 over the last decade. "The shale revolution changed everything," says one of its graduates Ryan Watt, whose Addax Minerals has raised about $35M to speculate on oil.
- ETFs: XLE, ERX, VDE, OIH, ERY, XOP, DIG, DUG, FRAK, XES, IYE, IEO, IEZ, PXE, PXJ, PXI, PSCE, FENY, RYE, FXN, DDG, USO
The PowerShares S&P SmallCap Energy Portfolio (Fund) is based on the S&P SmallCap 600 Capped Energy Index® (Index). The Fund will normally invest at least 90% of its total assets in common stocks that comprise the Index. The Index is designed to measure the overall performance of common stocks of U.S. energy companies. These companies are principally engaged in the business of producing, distributing or servicing energy related products, including oil and gas exploration and production, refining, oil services, pipeline, and solar, wind and other non-oil based energy. The Index is a subset of the S&P SmallCap 600 Index, which is a float-adjusted, market-capitalization-weighted index reflecting the U.S. small-cap market.
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