It was a week where oil prices held on to a small gain but natural gas futures fell sharply.

On the news front, with earnings taking center stage yet again, the major headlines came from EOG Resources Inc. (EOG Quick QuoteEOG - Free Report) and Apache Corp.’s (APA Quick QuoteAPA - Free Report) second-quarter results, wherein they battled plunging commodity prices to report contrasting numbers.

Overall, it was a mixed week for the sector. While West Texas Intermediate (WTI) crude futures edged up 0.5% to close at $41.80 per barrel, natural gas prices ended down 3.6% to $2.772 per million Btu (MMBtu). (See the last ‘Oil & Gas Stock Roundup’ here: Chevron & TOTAL Beat Q2 Earnings, Exxon & Shell Can't.)

Oil prices booked a modest weekly gain after the U.S. Energy Department's latest inventory release showed a surprise drop in gasoline inventories soothing fears about the fuel’s demand. Things further brightened with the release of upbeat U.S. employment data that boosted optimism about the health of the world’s largest oil consumer.

However, to a large extent, these factors were offset by the Baker Hughes report revealing a sixth straight rise in the U.S. oil rig count and pointing to the resurgence in shale drilling activities. A stronger dollar, which made the greenback-priced crude more expensive for investors holding foreign currency, also played spoilsport.

Natural gas, on the other hand, moved south following predictions of tepid cooling demand with forecasts of milder weather across the country over the next few days. Even a surprise drawdown in inventories could not stop the commodity’s downward movement.

Recap of the Week’s Most Important Stories

1.    Notwithstanding sharply lower commodity prices, independent energy explorer EOG Resources Inc. reported narrower-than-expected second-quarter 2016 loss. The outperformance came on the back of cost reduction and improving well productivity. In the quarter, EOG’s per-unit lease and well expenses fell 23%, while transportation costs decreased 13% from the prior-year period.

Looking to stem the rot from plunging oil and gas prices, EOG has maintained its 2016 capital budget at $2.4–$2.6 billion, down 47% from last year’s level and 70% less than 2014. Further, the company plans to restrict its expenses to the highest return assets: the Eagle Ford and the Delaware Basin. (Read more: EOG Resources Incurs Lower-than-Expected Q2 Loss).

2.    U.S. energy firm Apache Corp. reported second quarter loss per share – excluding one-time items – of 26 cents, wider than the Zacks Consensus Estimate of a loss of 24 cents. The underperformance stems from low commodity prices that more than offset cost savings.

Revenues of $1,382 million were down 38% from the year-ago quarter but came above the Zacks Consensus Estimate of $1,313 million amid robust production from Apache’s key North American onshore plays despite a significant reduction in capital.

Apache was able to lower its capital spending by 60% in 2015 to $4.2 billion, while this year it plans to spend even less - at the high end of its guidance range of $1.4 to $1.8 billion. (See More: Apache Posts Q2 Loss, Beats Revenue on Robust Volumes.)

3.    Houston, TX-based upstream energy firm Marathon Oil Corp. (MRO Quick QuoteMRO - Free Report) posted second-quarter adjusted loss of 23 cents per share, a shade narrower than the Zacks Consensus Estimate for a loss of 24 cents. Lower total expenses led to the improvement. Contribution from Equatorial Guinea along with the restart of output from Brae Alpha in the U.K. also supported the results. The positives were offset partially by lower commodity prices and temporary production shutdown during the Canadian wild fire.

The company’s exploration expenses for the quarter came in at $189 million, significantly higher than $111 million in the year-earlier quarter. However, Marathon Oil’s total quarterly cost and expenses fell 22% to $1,454 million. (Read more: Marathon Oil Posts Narrower-than-Expected Q2 Loss).

4.    Independent refiner Tesoro Corp. reported second-quarter 2016 adjusted earnings from continuing operations of $3.47 per share, which comfortably surpassed the Zacks Consensus Estimate of $1.77. Significant contribution from the logistics segment supported the results. The bottom line, however, deteriorated from the year-ago quarter figure of $4.62 per share on lower income from the refining and the marketing units.

Operating income in Tesoro’s ‘Logistics’ unit jumped 20% year-over-year to $125 million, mainly on the back of volume growth in crude oil gathering and natural gas gathering and processing businesses, plus contributions from the purchase of Los Angeles Storage and Handling Assets.

Total refined product sales averaged 974 thousand barrels per day, a modest 1% higher than the year-ago quarter. Worryingly, gross refining margin dropped 17.8% year over year to $15.7 per barrel.  (See More: Tesoro Q2 Earnings and Revenues Beat.)

5.    Calgary-based Inter Pipeline Ltd. Has agreed to buy the Canadian assets of natural gas pipeline company Williams Companies Inc. (WMB Quick QuoteWMB - Free Report) and its unit – Williams Partners L.P. – for C$1.35 billion.

The to-be-acquired properties include two liquids extraction units near Fort McMurray, a gas processing plant for the products near Redwater, and a 420-kilometre 43,000 barrel-a-day pipeline system connecting both the facilities. Oklahoma-based Williams claims to have spent about $2.5 billion on the development of its Canadian business over a 16-year period.

As part of the transaction, Inter Pipeline will also take control of the blueprints for a C$1.85-billion propane plant northeast of Edmonton that is nearing a final investment decision.

Price Performance

The following table shows the price movement of the major oil and gas players over the past week and during the last 6 months.

Over the course of last week, ‘The Energy Select Sector SPDR’ was up 3.94% on encouraging gasoline supply data. Consequently, investors witnessed buying in most market heavyweights. The best performer was offshore drilling giant Transocean Ltd. (RIG Quick QuoteRIG - Free Report) that added 10.02% to its stock price.

Longer-term, over the last 6 months, the sector tracker has jumped 26.00%. Transocean was again the main beneficiary during this period, experiencing a 26.94% price increase.

What’s Next in the Energy World?

As usual, market participants will be closely tracking the regular weekly releases i.e. the U.S. government data on oil and natural gas. Energy traders will also be focusing on the Baker Hughes data on rig count, as well as monthly reports from world energy watchdogs IEA and EIA.

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