Download - Energy Stocks Take a Breather This Week
Energy Stocks Take a Breather This Week
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Image Source: Marathon Oil.
After a meteoric rise from the mid-$20s to more than $40 a barrel, crude took a breather this week ending down 4% and below $40 a barrel. That took energy stocks down with it, with dozens dropping double digits this week, giving up a portion of their recent gains. According to S&P Capital IQ data, some of the worst-performing energy stocks this week were California
Resources (NYSE: CRC), Marathon Oil (NYSE: MRO), Dorian LPG (NYSE: LPG), Denbury
Resources (NYSE: DNR), and Bristow Group (NYSE: BRS).
What:Marathon Oil (NYSE: MRO) slumped 10.1% this week.
So What: Key driver: Crude oil gives back
recent gains After hitting bottom last
month, crude oil had risen sharply in March before topping out this week
That initial rally sent oil stocks rocketing higher, with Marathon Oil up 40% over the past month
Now What: That said, a much worse-than-
expected oil inventory number stopped that rally in its tracks, sending crude down 4% this week
That let the air out of Marathon’s recent rally
Key takeaway: Investors are taking a breather after the monster rally off the bottom
What:Bristow Group (NYSE: BRS) dropped 12.3% this week.
So What: Key driver: The crude oil
breather Bristow, likewise, fell alongside
oil prices this week giving back some of its recent gains
Still, after slumping more than 12% this week the stock is up more than 21% over the past month
Now What: Investors are beginning to
be hopeful that the bottom has been hit and that the oil market can finally start to heal
Key takeaway: Despite the relief rally, investors realize that oil has a long way to go before it will improve Bristow’s fortunes
What:
Denbury Resources (NYSE: DNR) fell 13% this week.
So What: Key driver: The oil price
breather Denbury has been a big
beneficiary of the bounce off the bottom with its stock more than doubling over the past month
That said, with oil giving back some of its gains, so is Denbury, though its still up 137% in just the past month
Now What: While oil around $40 a barrel
will help Denbury’s cash flow, it still needs much higher oil prices later this year, which is when its lucrative oil hedges start to roll off
Key takeaway: Investors know that oil has a long way to go before Denbury is in the clear
What:Dorian LPG (NYSE: LPG) fell more than 21% this week.
So What: Key driver: An analyst
downgrade UBS downgraded Dorian from
buy to neutral citing a downturn in the liquefied petroleum gas shipping market that was steeper than expected
It also cut its price target from $19 to $12.50
Now What: UBS also lowered its net asset
value estimate for the company, reflecting the declining asset values given the weakening environment
Key takeaway: Analysts and investors don’t see much upside in the near-term because of an increase in the supply of ships and the currently weak commodity price environment
What:California Resources (NYSE: CRC) slumped over 30% this week.
So What: Key driver: The oil price
breather Few oil companies have enjoyed
the recent oil price rally more than California Resources, which at one point had soared 550% from its bottom
Still, even after this week’s 30% drop, it’s up a remarkable 313% over just the past month
Now What: Despite that rally, the
company needs much higher oil prices in order to support its large debt load
Key takeaway: Investors know that this company isn’t out of the woods just yet
This could be the next billion-dollar iSecret