Oil Companies
Pay attention to these data:
a. Geographical exposure
b. Production mix (oil, natural gas, etc.)
c. For refiners, look at refining margins; defined as the difference between the price refiners pay for the price of oil and the price of the refined products (such as gasoline). Currently refining margins for refiners are narrowing as tepid U.S. demand dampens gasoline prices. Meanwhile, crude prices are shooting up amid Middle East tensions and falling U.S. dollar.
Examples: Valero as pure-play refiner (it doesn't pump any oil on its own) and Chevron as Integrated
d. Production growth. Drop in production in Q3 is normal since this is a time when majors carry out maintenance work on refineries and production facilities. Most major oil companies aren't expecting to grow production at all, as evidenced by the recent Q3 results. An exception is the main Chinese oil and gas producer PetroChina that projects to grow 4-6% a year. It has been able to find enough new oil and gas to continually increase its reserves even as it pumps more, through acquisitions and better exploration and production techniques.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment