Oasis Petroleum (OAS) Stock Climbing as Oil Prices Rise

NEW YORK (TheStreet) -- Shares of Oasis Petroleum (OAS) are higher by 6.54% to $17.82 in mid-day trading on Tuesday afternoon, as the rising price of oil sends some energy stocks soaring today.

Crude oil (WTI) is up by 1.84% to $60.84 per barrel and Brent crude is gaining by 2.34% to $66.43 per barrel, according to the CNBC.com index.

The price of the commodity jumped on a weak dollar and as OPEC slightly upped its world oil demand growth forecast, Reuters reports.

The dollar is down by 0.53% this afternoon, according to the Wall Street Journal dollar index. When the dollar declines commodities dominated by the greenback tend to rise.

Additionally, OPEC made a slight adjustment to its oil demand growth forecast, raising it to 1.18 million barrels per day from its previous 1.17 million barrels per day estimate.

"The market is really torn between wanting to be on the bullish side when you have a weaker dollar and geopolitical situations like today, and staying in accordance with fundamentals, when there's already a deluge of West African crude barrels out there without buyers," Andrew Lipow, president of Lipow Oil Associates told Reuters.

Airstrikes  in Yemen led by Saudi Arabia and aimed at Iran-allied Houthis hit a rocket base in Sanna, the capital of Yemen, Reuters noted, adding that the conflict has caused concerns regarding oil supply routes. Yemen is a marginal oil producer but its proximity to shipping lanes is what's causing worry.  

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 63.38%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, OAS's net profit margin of -10.00% significantly underperformed when compared to the industry average.
  • The debt-to-equity ratio of 1.02 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 0.39, which clearly demonstrates the inability to cover short-term cash needs.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, OASIS PETROLEUM INC'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: OAS Ratings Report

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