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Energy Sector Movers, Losers and News: OPEC in talks to freeze oil production

This week the eyes and ears of the world focus on Iran and Iraq after Saudi Arabia, Venezuela, Qatar, and Kuwait agreed to freeze oil production to January levels if other leading producers agree to follow suit. The hope is this agreement would boost the ever dropping oil prices to more sustainable levels. But, this hope is small after Iran’s oil minister, Bijan Zanganeh, refused to commit to limiting oil output levels.

Unfortunately, according to the Wall Street Journal, January levels would still leave a 300 million barrel per year surplus. Additionally, Iraq hit record production levels as the country attempts to fund the war with the Islamic State. The need for cash now deters the country from slowing output levels. Iran too, has no plans for slowing exports now that Western sanctions related to the nuclear program have finally ended. The first shipment of Iranian crude oil was sent to Europe this week and the hope is to earn back market share from its major competitor, Saudi Arabia.

Oil price roller coaster

Oil prices rose 14 percent between Tuesday and Thursday during talks of the output freeze, but opened at $30.60 per barrel Friday morning, a small increase from last Friday at $29.44 per barrel, but a 0.55 percent drop from this week’s high of $30.77 per barrel. WTI was trading at $29.62 per barrel at 9:35 a.m.

The United States US Energy Information Administration (EIA) reports domestic crude stock rose by 2.1 million barrels last week, bringing the total up to 504.1 million barrels, a record high. Meanwhile North Dakota’s latest output figures show December crude at 1.15 million barrels per day, a negative 2.5 percent change from November’s output of 1.18 million barrels per day. North Dakota also reports only 38 active rigs as of Friday, February 19 as opposed to 127 rigs on this day last year.

Other energy sector news this week:

ConcoPhillips announced on Thursday, February 18 the retirement of Chief Financial Officer (CFO) and Vice President Jeff Sheets. This resulted in a restructuring of leadership roles. Don Wallette, Jr. is now CFO, and current vice presidents Don Wallette, Jr., Al Hirschberg and Matt Fox will continue to execute their current roles while also taking on the duties of Sheets, effective April 1.

Devon Energy Corporation (NYSE:DVN) stocks opened this morning at $19.25 per share and continue to drop. This is an 11.25 percent drop from its close last Friday at $21.69 per share. This follows a public offering of 69,000,000 shares of common stock to be sold at $18.75 per share.  Additionally, the Oklahoma City company also announced a dividend decrease from 24 cents per share to just 6 cents per share. Devon additionally announced plans to lay off 1000 employees earlier this week.

SunEdison (NYSE:SUNE)  released a strategy change to focus on Solar Materials and production technologies. Therefore, the company will be selling the silicon wafer production facility in Malasyia, close its polysilicon production facility in Pasadena, Texas and focus on operations in Oregon. According to Fortune, this change will cost the solar energy company $435 million and 220 jobs in Texas. The stock market reacted to the change with a $1.48 per share open today as opposed opening last Friday at $2.11 per share before the announcement. The NYSE requires stock value to be at a minimum of $1 per share to keep from being delisted.

While most oil companies have cut budgets and laid off workers Anadarko plans to build a new man camp in West Texas, near El Paso. Eagle Ford Texas reports two reasons for building the new facility: first, to provide accommodations for current workers and secondly, to allow flexibility to expand when the time comes and oil prices have risen.

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