Oil and Gas: Bearish Trends to Continue

Early last week, oil prices traded higher at $75.95, taking positive cues from the appreciating euro against the dollar. Buoyed by improving economic sentiment in the eurozone, oil prices rose to the weekly high of $76.63.

Oil started on a bearish note after the American Petroleum Institute reported increasing U.S. crude and gasoline stocks. Meanwhile, the Department of Energy reported rising distillates inventories last week. In addition to increasing inventories, growing jobless claims pressured oil prices to trade lower.

Baker Hughes(BHI) rig count slipped to 985. Oil prices fell on Friday, as rig counts are still higher than the last month average.

Gas prices showed a bearish trend last week due to oversupply and global economy concerns. The Henry Hub natural gas last traded at $4.11 per MMBtu on the NYMEX, falling more than 3%.

Calendar spread between NYMEX September and October crude oil contracts rose to -0.36 last week. Calendar spreads for NYMEX natural gas between September and October contracts reached - 0.020 last week from -0.022.

Past week, major oil and gas companies traded lower due to the bearish trend in crude oil and natural gas prices. Integrated oil and gas majors BP(BP), Total(TOT), Chevron(CVX), ConocoPhillips(COP), and Exxon Mobil(XOM) were down 6.5%, 3.3%, 3.0%, 2.0% and 1.7%, respectively.

Other oil and gas producers Marathon Oil(MRO), EOG Resources(EOG), Devon Energy(DVN), Apache(APA), and Occidental Petroleum(OXY) lost 3.8%, 2.9%, 2.4%, 0.8% and 0.4% of their respective market values.

>To order reprints of this article, click here: Reprints