This week WTI crude oil hit its high Tuesday at $42.17 per barrel and opened Friday at $40.62 per barrel. This is a 2.3 percent increase from last week when the benchmark traded at $39.72 per barrel. The Associated Press reported this morning that energy stocks are slipping with the price of oil.
International LNG trade records new high
Global trade of liquefied natural gas (LNG) grew 2.5 percent this year. Drivers of the trade increase include the new liquefaction plants in Indonesia and Australia, as well as new LNG exports to Europe and the Middle East. The United States is also on track to become the leading supplier of flexible LNG since Cheniere Energy’s Sabine Pass facility opened this year.
Production freeze still possible?
The Organization of Petroleum Exporting Countries (OPEC) and other major producers are scheduled to meet Sunday in Doha, Qatar. The discussion will determine whether to implement a production cap on oil in order to improve prices. No matter the results of this meeting, it will have an impact on the price of crude and investor confidence. In recent weeks, the price of oil has timidly risen in hopes a deal will be solidified that will help to chip away at the oil glut and encourage higher oil prices globally.
IEA on global demand
On Thursday, the International Energy Agency (IEA) released its monthly Oil Market Report. Estimates place global demand at 1.2 million barrels per day in 2016, as opposed to last year when 1.8 million barrels per day were required. China, the United States and Europe all contribute to the diminishing numbers. OPEC crude production fell in March and stayed mostly the same in non-OPEC countries, which caused a small change in total supply.
Chesapeake Energy Corporation (NYSE: CHK) announced earlier this week an agreement between the company and lenders that allows $4 billion in revolving credit. In return, assets were offered as collateral, and Chesapeake agreed to maintain a minimum of $500 million in liquidity. Investors reacted positively to this news. CHK shares opened today at $6.01 per share after closing last Friday at $3.76 per share, nearly a 60 percent increase.
Southwestern Energy Company (NYSE: SWN) also increased shareholder value this week by 18.09 percent. Last week, SWN stocks closed at $8.68 per share, but opened this morning at $10.25 per share.
Peabody Energy filed for chapter 11 bankruptcy protection this week. The nation’s largest coal miner has faced environmental, technological, and economical changes that have left it unable to face its debt burden.
Goodrich Petroleum also announced today the company voluntarily filed for Chapter 11 in order to reorganize debt and restructure the balance sheet.