NEW YORK (TheStreet) -- Oasis Petroleum (OAS) - Get Report stock is rising 4.12% to $11.63 in afternoon trading on Friday, following a hike in oil prices driven by a drop in the weekly U.S. oil rig count.
WTI crude is up 0.69% to $46.38 per barrel, while Brent crude is increasing 1.27% to $49.42 per barrel this afternoon, according to the CNBC.com index.
U.S. oil companies took 16 oil rigs out of production this week, making it the ninth consecutive week of declines, according to Baker Hughes (BHI) data, Reuters reports.
At 578, the U.S. rig count is now at its lowest since June 2010.
"Although providing fundamental rationale for a 6% single day advance remains challenging, we are conceding to a significant improvement in the short term chart picture and a need to lift pricing in order to attract fresh selling," Ritterbusch & Associates' Jim Ritterbusch told Reuters.
Additionally, China is expected to double crude oil imports in 2016, while Saudi Arabia and Iraq seem to have produced less oil this month, lowering OPEC's total production, Reuters added.
Houston-based Oasis Petroleum acquires and develops oil and natural gas resources in North Dakota and Montana.
Separately, TheStreet Ratings team rates OASIS PETROLEUM INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
We rate OASIS PETROLEUM INC (OAS) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The gross profit margin for OASIS PETROLEUM INC is rather high; currently it is at 66.89%. Regardless of OAS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OAS's net profit margin of -23.13% significantly underperformed when compared to the industry average.
- The debt-to-equity ratio of 1.03 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.45, which clearly demonstrates the inability to cover short-term cash needs.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, OASIS PETROLEUM INC's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: OAS