Schlumberger

Schlumberger Ltd (SLB - Get Report) posted stronger-than-expected fourth-quarter revenue Friday, and declared a 50 cent share dividend, even as it cautioned that recent oil price volatility has added more uncertainty into its 2019 outlook.

Schlumberger said adjusted earnings for the three months ended in December came in at 36 cents a share, largely in-line with the consensus forecast. Revenues slowed 4% from the previous quarter to $8.2 billion but beat Street estimates of $8.04 billion. 

"Looking forward to 2019, we expect a more positive supply- and demand-balance sentiment to lead to a gradual recovery in the price of oil over the course of the year, as the OPEC and Russia cuts take full effect," CEO Paal Kibsgaard said. 'In the meantime, the recent oil price volatility has introduced more uncertainty around the E&P spending outlook for 2019, with customers generally taking a more conservative approach at the start of the year."

'For Schlumberger, this means that even with the current oil prices, we expect solid, single-digit growth in the international markets while in North America land, the increased cost of capital and focus on aligning investments closer to free cash flow has introduced more uncertainty to the outlook for both drilling and production activity."

Schlumberger shares rose $3.36 (8.12%) to close at $44.73 on Friday.

U.S. oil prices whipsawed through most of the fourth quarter, falling to a multi-year low of $42.53 per barrel on Christmas Eve before rebounding more than 20% to trade at $52.52 on Friday as OPEC members reported the biggest monthly drop in production in nearly two year.

OPEC said collective output from its members fell by 751,000 barrels a day last month, to 31.58 million, led by a 368,000 reduction from swing producer Saudi Arabia as the cartel prepared to meet its own agreed productions cuts that kicked-in on January 2.

At the same time, OPEC trimmed its 2019 daily demand forecast by 910000 barrels to 30.85 million, citing economic and trade uncertainty. OPEC also called on members to "redouble" their efforts to keep oil markets balanced over the whole of 2019.

 U.S. output is likely to top 12 million barrels per day this year, the Energy Information Administration said earlier this week, as the shale oil boom continues to add to swelling domestic stockpiles and push the United States to the top of the world production table.

 The EIA said last month that production from the country's seven biggest shale areas, including the Permian Basin, will rise to around 8.1 million in early 2019. That's likely to add to overall U.S. output, which hit a record 11.9 million barrels per day in the week ending January 11.
 
That's helped drive energy sector gains over the past three months, with the S&P OIl & Gas Exploration & Production total return index rising 27.8% since mid-October. Crude's late December rebound, meanwhile, which has added more than 20% to global oil prices since the Christmas Eve trough, has lifted Chevron Corp.   ( CVX - Get Report) shares 10.86% higher, to $111.96 each, and rival Exxon Mobil ( XOM - Get Report) 10.1% higher at $72.13 each.
 
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