WTI crude is rising 5.85% to $45.05 per barrel, while Brent crude is gaining 5.13% to $50 a barrel this afternoon, according to the CNBC.com index.
Oil prices saw a 10% increase on Thursday after dropping to its lowest close since February 2009 on Monday, due to a selloff in Chinese stock markets, Bloomberg reports.
"We're seeing a continuation of yesterday," Mizuho Securities USA director of the futures Bob Yawger told Bloomberg. "Energy is the place to park your cash if you want to make a healthy return. It's not just the futures are strong, equities are strong as well."
Bermuda-based Seadrill, an offshore drilling contractor, is also gaining after reporting better than expected earnings of 77 cents per share, compared with estimates of 63 cents per share, on Thursday.
Separately, TheStreet Ratings team rates SEADRILL LTD as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate SEADRILL LTD (SDRL) 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 revenue growth, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 22.5%. Since the same quarter one year prior, revenues slightly increased by 1.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Even though the current debt-to-equity ratio is 1.25, it is still below the industry average, suggesting that this level of debt is acceptable within the Energy Equipment & Services industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.82 is weak.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Energy Equipment & Services industry. The net income has significantly decreased by 86.1% when compared to the same quarter one year ago, falling from $3,068.00 million to $427.00 million.
- 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. In comparison to the other companies in the Energy Equipment & Services industry and the overall market, SEADRILL LTD's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full analysis from the report here: SDRL Ratings Report