Thursday, February 2, 2023
  • Submit news
  • Contact
  • DMCA
  • Cookie Privacy
  • Privacy Policy
  • Terms of Use
Oil Market News
  • Home
  • Marketdaily
  • Price
  • crudenow
  • Companies
  • politics
  • Gas
  • investing
  • Stock
  • OPEChot
  • brend
  • ships
Oil Market News
Home Stock

an oil stock I wouldn’t touch with a bargepole By The Motley Fool

9 months ago
in Stock
an oil stock I wouldn’t touch with a bargepole By The Motley Fool
Share on FacebookShare on Twitter


© Reuters.  Stock market crash: an oil stock I wouldn’t touch with a bargepole© Reuters. Stock market crash: an oil stock I wouldn’t touch with a bargepole

Oil prices have stormed from their multi-year lows of late April. From troughs below $20 per barrel, the benchmark is now trading around the $32 mark. Easing lockdown restrictions across the globe have boosted prices, but the outlook for black gold values remains extremely murky.

It’s not just the crude producers that need to worry, of course. Suppliers of key oilfield services like Hunting (LSE: LON:) also find themselves in huge peril. But don’t just take my word for it: a report just released by the International Energy Agency reveals the weak profits picture for these engineers.

The body’s latest World Energy Investment report that’s just been released suggests that capex spend across the oil and gas sector will plunge 32% in 2020 to just above $250bn. Lockdown measures have hampered investment activity, sure. But this is not the main reason why spending is likely to tank, it says. Instead, “planned 2020 investments in upstream oil and gas have been slashed under pressure from the collapse in oil prices and demand”.

Under pressure
It’s a phenomenon that’s already delivering a body blow to small-cap Hunting and its peers. In mid-April, it advised that “the impact of the oil price decline has affected demand within the Group’s segments focused on US onshore completions since the end of March 2020.”

But this was not all. It added that “other segments are likely to see declines towards the end of quarter two, given that orders are continuing to be completed across all of [our] operating regions for a variety of offshore and international projects.” With work drying up, Hunting yanked its full-year guidance and pulled the dividend at the same time.

An oil play to avoid?
Glass-half-full investors might think that this is as bad as things will get for Hunting. Energy demand is likely to pick up again as lockdown measures are eased. And this should consequently drive oil prices and profits amongst crude producers higher again.

But I’m not convinced that values of the liquid commodity will continue to recover. Whilst off-take is indeed improving, supplies remain quite abundant and keep topping expectations. Latest data from the American Petroleum Institute showed US stockpiles up by 8.7m barrels when a 1.9m-barrel reduction had been tipped.

Investors need to consider how far oil prices can continue their recent recovery, given that the world is on the cusp of a painful (and possibly prolonged) economic downturn. The profits outlook for Hunting remains pretty murky not just for the near term.

City forecasts seem to be in agreement. They suggest that the small-cap will follow a 77% fall in annual profits in 2020 with a 27% drop next year. Investors need to be concerned about the state of Hunting’s balance sheet as well. In March it had just $22.3m of net cash on its books. This was down almost $100m from a year earlier.

The risks to Hunting are considerable. And yet it trades on a fatty forward P/E ratio above 20 times. I find it hard to envisage any reason why investors would want to buy today. I’d avoid it like the plague.

The post Stock market crash: an oil stock I wouldn’t touch with a bargepole appeared first on The Motley Fool UK.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Motley Fool UK 2020

First published on The Motley Fool

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Latest Oil News

InPlay Oil Corp. Confirms Monthly Dividend for February 2023

InPlay Oil Corp. Confirms Monthly Dividend for February 2023

February 1, 2023
Live news: PayPal to cut 7% of its workforce – Financial Times

Live news: PayPal to cut 7% of its workforce – Financial Times

January 31, 2023
Hudson inflates Biden’s role in oil prices

Hudson inflates Biden’s role in oil prices

January 30, 2023
Market Highlights: FDA backtracks on cannabis oil, and 5 ASX small caps to watch

Market Highlights: FDA backtracks on cannabis oil, and 5 ASX small caps to watch

January 29, 2023





uk.investing.com

Tags: bargepoleFoolMotleyoilstocktouchwouldnt
Previous Post

Oil prices post a loss even as weekly U.S. crude supplies and stocks at the Cushing

Next Post

Biden’s Clean Energy Revolution Could Send These Stocks Soaring

Related Posts

InPlay Oil Corp. Confirms Monthly Dividend for February 2023

InPlay Oil Corp. Confirms Monthly Dividend for February 2023

by Oil Market News
February 1, 2023
0

CALGARY AB, Feb. 1, 2023 /CNW/ - InPlay Oil Corp. (TSX: IPO) (OTCQX: IPOOF) ("InPlay" or the "Company") is pleased...

Live news: PayPal to cut 7% of its workforce – Financial Times

Live news: PayPal to cut 7% of its workforce – Financial Times

by Oil Market News
January 31, 2023
0

Live news: PayPal to cut 7% of its workforce Financial Times news.google.com

Hudson inflates Biden’s role in oil prices

Hudson inflates Biden’s role in oil prices

by Oil Market News
January 30, 2023
0

A North Carolina congressman says President Joe Biden caused an energy crisis in America and that his administration has done...

Market Highlights: FDA backtracks on cannabis oil, and 5 ASX small caps to watch

Market Highlights: FDA backtracks on cannabis oil, and 5 ASX small caps to watch

by Oil Market News
January 29, 2023
0

The ASX is set to extend gains on Monday Earnings season continues, with Intel’s earnings raising an alarm for the...

Weaker Orders, Investment Underscore Ailing US Manufacturing

Weaker Orders, Investment Underscore Ailing US Manufacturing

by Oil Market News
January 28, 2023
0

(Bloomberg) -- US manufacturing showed more signs this week of succumbing to the Federal Reserve’s aggressive interest-rate hikes that are...

White House blasts Big Oil stock buybacks again as Chevron profits double

White House blasts Big Oil stock buybacks again as Chevron profits double

by Oil Market News
January 27, 2023
0

By Nandita Bose and Jarrett RenshawWASHINGTON (Reuters) - The White House on Friday launched a fresh attack against U.S. oil...

Next Post
Biden’s Clean Energy Revolution Could Send These Stocks Soaring

Biden’s Clean Energy Revolution Could Send These Stocks Soaring

Subscribe
Notify of
guest
guest
0 Comments
Inline Feedbacks
View all comments

Trend Oil News

Winter Weather Hinders Oil Production, Sends Gas Prices Even Higher – NBC Connecticut

Winter Weather Hinders Oil Production, Sends Gas Prices Even Higher – NBC Connecticut

8 months ago
ESG Investing Fight Is Heating up in Kentucky and Could Cost Taxpayers

ESG Investing Fight Is Heating up in Kentucky and Could Cost Taxpayers

1 week ago
Russian LNG Ship Concludes Northern Sea Route Voyage

Russian LNG Ship Concludes Northern Sea Route Voyage

7 months ago
Sri Lanka News on Protests and President Rajapaksa: Live Updates

Sri Lanka News on Protests and President Rajapaksa: Live Updates

7 months ago
Most Floridians favor increasing domestic oil production to lower gas prices, poll

Most Floridians favor increasing domestic oil production to lower gas prices, poll

7 months ago
ADVERTISEMENT
Shell: the big bet on natural gas is now paying off

Shell: the big bet on natural gas is now paying off

February 2, 2023

New study shows huge variation in how different oil companies manage climate

February 1, 2023

Texas Justices Consider Company’s Pause on Oil & Gas Payments

February 1, 2023

Orbital Sidekick Raises $10M Investment to Monitor Oil and Gas Industry from Space 

February 1, 2023

InPlay Oil Corp. Confirms Monthly Dividend for February 2023

February 1, 2023

US Close- Fed signals more hikes coming, Powell says disinflation process begun, ADP

February 1, 2023

Crude Oil

4 Days from Deadline, EU Fails To Agree On Russian Oil Products Price Cap

4 Days from Deadline, EU Fails To Agree On Russian Oil Products Price Cap

February 1, 2023
Oil rises after U.S. fuel stocks draw down; economic concerns loom

Oil prices settle steady on higher U.S. demand, weaker dollar

January 31, 2023
S&P 500 Down 1%; Crude Oil Drops Over 2%

S&P 500 Down 1%; Crude Oil Drops Over 2%

January 30, 2023
Russia Can’t Replace the Energy Market Putin Broke

Russia Can’t Replace the Energy Market Putin Broke

January 29, 2023

Investing

Orbital Sidekick Raises $10M Investment to Monitor Oil and Gas Industry from Space 

Orbital Sidekick Raises $10M Investment to Monitor Oil and Gas Industry from Space 

February 1, 2023
Crude Oil Shielded From Bond and Stock Market Rout

Clean-energy investing poised to top money backing oil and gas after hitting a record

January 31, 2023
Crude Oil Shielded From Bond and Stock Market Rout

The Cushing® MLP & Infrastructure Total Return Fund Announces Fund Name Change

January 30, 2023
Boeing’s 747, the original jumbo jet, prepares for final send-off By Reuters

Boeing’s 747, the original jumbo jet, prepares for final send-off By Reuters

January 29, 2023

Market

Shell: the big bet on natural gas is now paying off

Shell: the big bet on natural gas is now paying off

February 2, 2023
Exxon: Big Oil should invest forward, not buy back

Exxon: Big Oil should invest forward, not buy back

February 1, 2023
Mexico’s Pemex seeks more than $1bn in bond sale

Mexico’s Pemex seeks more than $1bn in bond sale

January 31, 2023
Shell launches shake-up under new chief Wael Sawan

Shell launches shake-up under new chief Wael Sawan

January 30, 2023

OPEC

US Close- Fed signals more hikes coming, Powell says disinflation process begun, ADP

US Close- Fed signals more hikes coming, Powell says disinflation process begun, ADP

February 1, 2023
‘OPEC does not control the price’: OPEC President | OPEC News

‘OPEC does not control the price’: OPEC President | OPEC News

January 31, 2023
OPEC+ Closely Watches Chinese Factory Data

OPEC+ Closely Watches Chinese Factory Data

January 30, 2023
Week Ahead: FOMC, BOE, ECB, OPEC, NFP and Big Tech Earnings

Week Ahead: FOMC, BOE, ECB, OPEC, NFP and Big Tech Earnings

January 29, 2023
  • Submit news
  • Contact
  • DMCA
  • Cookie Privacy
  • Privacy Policy
  • Terms of Use

© 2022 OilMarket.News

No Result
View All Result
  • Home
  • Market
  • Price
  • crude
  • Companies
  • politics
  • Gas
  • investing
  • Stock
  • OPEC
  • brend
  • ships

© 2022 OilMarket.News

wpDiscuz
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.