Oil and Gas Equities Decline Amid OPEC Meeting Lull and Interest Rate Concerns

Strategic Insights -

The oil and gas sector experienced a significant decline last week, with the Oil Daily 30 Composite dropping 5.7%, as investors awaited news from the OPEC meeting that ultimately produced no surprise. Despite a modest gain in oil prices, with November benchmark West Texas Intermediate closing at $24.76/bbl, the sector was dragged down by volatile oil field service and drilling stocks. Natural gas prices also saw a firming, with spot prices at the Henry Hub in Louisiana closing at $2.63/MMBtu. However, concerns about interest rates continued to weigh on the broader market, with the Dow Jones Industrial Average falling approximately 4.8% last week.

Key Takeaways:

  • The Oil Daily 30 Composite dropped 5.7% last week, led by a decline in oil field service and drilling stocks.
  • November benchmark West Texas Intermediate gained 58 cents/bbl for the week, closing at $24.76/bbl.
  • Domestic upstream fundamentals benefited from a firming in natural gas prices, with spot prices at the Henry Hub in Louisiana closing at $2.63/MMBtu.
  • White Plains, N.Y.-based Trigen Energy Corp. gained 20.5% as investors bet on a buyout offer from France's Suez-Lyonnaise des Eaux.
  • Woodlands, Texas-based Mitchell Energy & Development's shares rose amid drilling success at its Barnett Shale play in North Texas.
  • Service companies and drilling contractors gave back recent gains, with Pride International Inc. and Ensco International Inc. being among the biggest losers.

Statistics:

  • The Oil Daily 30 Composite dropped 5.7% last week.
  • November benchmark West Texas Intermediate gained 58 cents/bbl for the week, closing at $24.76/bbl.
  • Domestic upstream fundamentals jumped 2 cents/MMBtu for the week.
  • Trigen Energy Corp. gained 20.5% on the news of a buyout offer from France's Suez-Lyonnaise des Eaux.
  • Mitchell Energy & Development has 213 Bcf of gas reserves at its Barnett Shale play in North Texas.
  • Pride International Inc. and Ensco International Inc. were among the biggest losers in the sector.

Sources:

  • The Oil Daily
  • West Texas Intermediate (WTI)
  • Henry Hub
  • Dow Jones Industrial Average
  • Trigen Energy Corp.
  • Suez-Lyonnaise des Eaux
  • Mitchell Energy & Development
  • Credit Suisse First Boston
  • Goldman Sachs