From Simons: Will Crude Grease the Market?:
There are 69 industry groups accounting for 68.6% of the
S&P 500's market capitalization with statistically significant negative relationships to crude oil prices. These groups are concentrated in the consumer-related and financial sectors. If we multiply their weights by the betas relative to crude oil, we get a negative impact of -3.56%.
There are only 16 industry groups accounting for 18.84% of the S&P 500's market capitalization with statistically significant
positive relationships to crude oil prices; these are concentrated, obviously, in the energy and utility sectors. However, their betas are much higher, so when we multiply them by their weights, we get a positive impact of 5.08%.
The net impact across industry groups is 1.51%. Every 1% rise in crude oil prices should lead to a 0.0151% rise in the S&P 500, all else held equal.
Read the full article.
From
CVX Preview: Is Downstream Up the River? (
RealMoney):
[
Chevron (CVX Quote)] is expected to earn $3.03 per share on revenue of $92.41 billion. In the year-ago quarter, Chevron earned $2.27 per share on revenue of $50.31 billion. The revenue growth could be directly related to the rise in crude oil and gasoline prices.
As we saw from today's [Jul. 31] disappointment at
Exxon Mobil (XOM Quote), the problems are with the downstream (i.e., refining and retail) operations. The upstream (i.e., exploration and production, or E&P) businesses are performing much better. We should expect much of the same from Chevron.
Read the full article (RealMoney registration required).
To listen to Chevron's second-quarter earnings conference call,
click here.
From
Exxon Energized by Crude Rebound Before Report (
RealMoney):
The Street is looking Thursday for [Exxon Mobil ] to report EPS of $2.52 on $144 billion of revenue, and that estimate has moved up very steadily from $2.19 on April 1 -- despite huge swings in oil.
Naturally, where XOM may lose in exploration & production, it will gain downstream in refining, which has been a cruddy business all around due to weak crack spreads.
Concern is running high on downstream, after Chevron reported poor refining and marketing results. Many of Chevron's issues, such as final price realization, marketing conditions, etc., are generally industrywide issues.
Read the full article (RealMoney registration required).
From
XOM Gets Drilled on a Two-Bit Miss (
RealMoney):
Exxon Mobil missed expectations by a fairly large amount, 25 cents below an estimate of $2.52... The company missed last quarter as well, when it also should have been booming.
Upstream realized substantially higher prices, but production was down 8%, more than originally expected by the analyst community. Management has guided to a "slight decline" in production in 2008, with a rebound in 2009... Issues such as extended maintenance work, slower North Sea ramps and changing pricing entitlements all factored in, but mature field declines may be the biggest issue.
Read the full article (RealMoney registration required).
From
Cramer: Exxon a Major Disappointment (Video, Jul. 31):
Jim Cramer: "Exxon has never believed in the price of the commodity [oil]. They never believed that it would get to this high, so they have not 'turned on the juice'... They've been a disappointment in finding oil... When I rank the oil stocks, I always rank Exxon last... It's just not the play for this group. I like
Occidental (OXY Quote) more... I like Chevron more ... But more importantly, I like the independents... I think
Devon's (DVN Quote) great..."
To watch the video, click the player below:
Plus, don't miss these Exxon Mobil-focused videos on
TheStreet.com TV: Mad About Options: Exxon Out of Gas (Jul. 14: Jud Pyle and Matt Buckley review Jim Cramer's recent bearish comments about Exxon Mobil and offer options strategies for traders and investors.) and
Cramer: Head for the Exit With Exxon (May 1: Cramer says after Exxon's latest numbers, look for the exit fast, and think about getting into integrated or natural gas stocks that are down.).
To listen to Exxon Mobil's second-quarter earnings conference call,
click here.
From
Cramer Interviews National Oilwell Varco CEO (Video, Jul. 31):
Jim Cramer: "When oil's down three [in one day], do you get a lot of cancellation of rig orders?"
Pete Miller: Not at all, Jim. If you take a look, our [
National Oilwell Varco (NOV Quote)] backlog today is at $10.8 billion. A lot of that backlog stretches out well into 2011, and we don't put something in our backlog unless it's contractually contracted for and it's also in many cases, a prepay. So the price of oil escalating and going up and down like that does not impact our capital business one iota."
Watch the video on TheStreet.com TV.
To listen to National Oilwell Varco's second-quarter earnings conference call,
click here.
From
ConocoPhillips Sees Profits Skyrocket:
ConocoPhillips (COP Quote), the world's fourth-largest publicly traded oil company, announced Wednesday [Jul. 23] that its second-quarter earnings topped expectations and surged from the year-ago period.
Profits rose to $5.44 billion, or $3.50 a share, a 31.4% increase over last quarter and handily ahead of analyst estimates of $3.33.
The results clearly demonstrate to investors that Conoco has fully recovered from its nightmare second quarter in 2007, during which Venezuela expropriated $2.1 billion worth of its assets. The oil company was ultimately left with a dismal $301 million in net income, or 18 cents a share, in the year-ago-period.
Conoco's balance sheet has a heavier percentage of exploration-and-production assets than most other integrated supermajors, and its E&P segment kicked into high gear in the quarter, capitalizing on soaring global prices for crude oil and natural gas.
Net operating income from E&P activities were just under $4 billion, beating its first-quarter E&P results by 39%. Its E&P segment recorded a $2.4 billion loss during the same period last year.
Read the full article.
From
Halliburton Hits Adjusted Profit Target:
Oilfield-services provider
Halliburton (HAL Quote) announced Tuesday [Jul. 22] that its second-quarter net income fell 67% from a year ago after accounting for the disposal of its
KBR (KBR Quote) (KBR Quote) unit, but on an adjusted basis profits were higher.
The company earned $507 million, or 55 cents a share, in the second quarter of 2008. Soaring prices for hycrocarbons convinced the firm to tweak its operating strategy last year, and it spun off its KBR unit to focus its attention on strengthening its international presence.
High prices for energy commodities spurred a wave of capital investment in worldwide drilling activity in the last 12 months, resulting in large increases in revenue from every continent where Halliburton operates.
Operating income from the firm's well-completion and production segment was $561 million last quarter, compared with $555 million a year ago and $529 million in the first quarter. The segment managed to overcome a 13% year-over-year decline in North American income with double-digit increases in its overseas regions.
Read the full article.
From
Crude Oil Futures Fall Below $125:
West Texas crude for September delivery dropped $3.98 to $124.44 a barrel [Jul. 23], and Brent crude lost $4.27 to $125.28 a barrel.
The declines came after data showed that total petroleum product consumption over the past four weeks was 2.1% lower than the same period last year. In particular, motor gasoline demand fell 2.4%, and jet fuel demand dropped 3.6%.
Read the full article. Plus, don't miss these related stories:
Crude Roughed Up by Dollar (Jul. 22),
Crude Oil Lifted by Tropical Storm Threat (Jul. 21),
Crude Oil Prices Continue to Slide (Jul. 17),
Crude Oil Pummeled Again (Jul. 16) and
Crude Oil Futures Fall Hard (Jul. 15).
