Oil prices continue to remain at trough levels, with the July 15 week reporting an oil price low of $45.95 per barrel for WTI oil. A number of factors kept oil prices down for the week including the two main weekly reports on oil, the Baker-Hughes Rig Count and the EIA’s Petroleum Status Report.
On Friday, the Baker-Hughes Rig Count reported an increase in North American rigs, which is likely to increase supply and keep downward pressure on prices. The total rig count for North America increased to 542 rigs from 521. The greatest increase was in the U.S. and Canada. The U.S. added seven new rigs for a total of 447 and Canada added 14 rigs for a total of 95.
On Wednesday, the EIA released its Petroleum Status Report, which showed crude oil inventories declining slightly for the week with a decrease of 2.5 million barrels. While crude oil inventories declined, commercial petroleum stock was higher, which likely had the greatest impact on oil prices for the week. Total commercial petroleum stock increased 7.1 million barrels for the week to 1,382.3 million, and for the year total commercial petroleum stock was 8.8% higher than a year ago.
During the July 15 week, BP’s (BP, Financial) announcement on its final account for its April 2010 oil spill also affected oil prices and oil stocks. The company reported that the cost of its April 2010 oil spill would be estimated at $61.6 billion. In BP’s second quarter, it will take an after-tax writeoff of $2.5 billion and the company says that further material impact is not expected. The report of its writeoff had little downward affect on energy sector stocks; however, it slightly weighed on oil prices for the week.
In a market report, Newsy gave a full summary of BP’s announcement this week.
Overall for the year, energy stocks have been gaining with an industry return of 15%. Despite the July 15 week’s lower oil prices and announcement from BP, energy stocks were higher for the week. BP is one company that has been reporting gains in the energy sector with a gain of 1.81% for the July 15 week and a gain of 17% year-to-date. Other stocks that have been leading in the energy sector year-to-date include Consol Energy (CNX, Financial), which is up 117%, Southwestern Energy (SWN, Financial), up 86%, WPX Energy (WPX, Financial), up 76% and Range Resources (RRC, Financial), up 75%.
Disclosure: I do not own any stocks in this article.
