Oil-field services giants Schlumberger (NYSE: SLB) and Halliburton (NYSE: HAL) perform work for large integrated oil companies like Exxon Mobil Corp (NYSE: XOM), national oil companies like Saudi Aramco, and smaller independents. These two giants operate in just about every oil- and gas-producing country in the world and provide indispensable services.
By virtue of their geographic reach and diversified service and product offerings, Halliburton and Schlumberger’s management teams have a bird’s-eye view of the oil industry that they often share during their quarterly earnings calls.
In the almost 20 years I’ve covered the energy sector, the insights gleaned from their conference calls have furnished countless investment ideas and read-throughs throughout the energy value chain. The first quarter was no exception.
During Schlumberger’s first-quarter earnings call, CEO Paal Kibsgaard discussed the looming air pocket in global oil supply–a consequence of the industry slashing spending on exploration and development. We’ve discussed this risk at length in Energy & Income Advisor, but early evidence of this shortfall has emerged.
The recent rally in oil prices has helped the exploration and production companies on our Focus List to catch up with the commodity. However, we continue to find favorable risk-reward propositions in the midstream space as we prepare for the MLP Association's annual investor conference.
This weeks' earnings announcements and conference calls highlighted the likelihood of further consolidation in the MLP space.
First-quarter earnings season is in full swing for the energy sector, with the major integrated oil and gas companies and the diversified oil-field service companies reporting results this week. Here’s a quick rundown of some of our key takeaways from the action.
In picking stocks with exposure to electric vehicles, we aim to identify names that also offer leverage to near-term upside catalysts.
Despite the market's recent focus on geopolitical risk, the supply-demand balance in the global oil market appears supportive of prices. Does the recent breakout in energy stocks suggest that investors have come around to this reality?
First-quarter earnings season has been good to the names on our Focus List.
We review key takeaways for investors from Schlumberger and Halliburton's first-quarter results and conference calls.
Although we became bullish on oil prices last summer when the commodity slipped into the $40s per barrel, our forecast for West Texas Intermediate (WTI) to average between $60 and $65 per barrel appears conservative—especially in an environment where involuntary supply disruptions and robust demand growth could result in short-term spikes to $80 per barrel. We now expect WTI to spend most of its time between $60 and $70 per barrel in 2018 and Brent to range between $65 and $75 per barrel.
We run through a number of industries with leverage to the electricification of transportation, highlighting potential pitfalls for investors to avoid and the businesses that offer the most near-term upside.
We examine the relationship between rising penetration of electric vehicles and growth in global oil demand.
Elliott and Roger on May. 31, 2018
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