Oil and Gas Shares Rebound Amid Crude Oil Price Increases

Strategic Insights -

A rebound in crude oil prices helped drive US oil and gas shares higher on the week, despite a more bearish trend on the broader market. The recovery in crude oil prices, led by a $1.92 increase to $22.82/barrel in November West Texas Intermediate, prompted exploration and production and oil and gas service companies to experience a 4% rise in share prices. Natural gas service company Hanover Compressor led the pack with a 23% jump, as it benefited from a 28 cents rise in November natural gas prices and a positive rating from analysts.

Key Takeaways:

  • The Oil Daily 30 Composite Index rose 0.6% on the week, driven by the increase in crude oil prices.
  • November West Texas Intermediate jumped $1.92 to $22.82/barrel, leading to a 4% rise in exploration and production share prices.
  • Natural gas service company Hanover Compressor led the pack with a 23% jump, benefiting from a 28 cents rise in November natural gas prices.
  • Oil and gas service company UTI Energy rose 22%, while E&P company Evergreen Resources rebounded from an 18% drop the previous week to rise 16%.
  • Analysts have been showing interest in service stocks due to the recovery in the crude oil market, leading to increased rig activity.
  • Shares in Hanover Compressor rode a positive rating from analysts and its addition to the Standard & Poors MidCap 400 index.
  • The Dow Jones Industrial Average suffered a 6% drop from the previous Friday, closing at 10019, due to fears of a rise in inflation prompted by higher wholesale prices.

Statistics:

  • The Oil Daily 30 Composite Index rose 0.6% on the week.
  • November West Texas Intermediate jumped $1.92 to $22.82/barrel.
  • Hanover Compressor led the pack with a 23% jump in share price.
  • UTI Energy rose 22% in share price.
  • Evergreen Resources rebounded from an 18% drop the previous week to rise 16% on the week.
  • The Dow Jones Industrial Average dropped 6% from the previous Friday, closing at 10019.
  • The October 11 announcement of Hanover Compressor's addition to the Standard & Poors MidCap 400 index marked a significant milestone for the company.
  • First Union Securities continued to rate Hanover a "strong buy".

Sources:

  • The Oil Daily
  • Forbes
  • Dow Jones Industrial Average
  • The New York Times (no specific date provided)
  • First Union Securities
  • Standard & Poors
  • Jefferies
  • Stephens
  • Donaldson, Lufkin & Jenrette