With oil prices improving remarkably, the overall energy business scenario is likely to have gained in the June quarter. This is expected to have aided upstream operations.
Oil Price Surge
The pricing scenario of West Texas Intermediate (WTI) crude was considerably higher in the second quarter of this year compared to the year-ago period. Per data from the U.S. Energy Information Administration, the monthly WTI crude spot prices for this year’s April, May and June were $101.78 per barrel, $109.55 per barrel and $114.84 per barrel, respectively. The commodity prices were higher than last year’s prices of $61.72 per barrel, $65.17 per barrel and $71.38 per barrel, respectively. The significant crude price improvement was primarily supported by the invasion of Ukraine by Russia.
Natural gas price was also healthier. Thus, the rise in oil and natural gas prices is likely to have aided upstream businesses.
Improved commodity prices have also led to an increase in drilling activities in U.S. resources. Rig count data, as reported by
Baker Hughes Company ( BKR Quick Quote BKR - Free Report) , revealed that the monthly total count of rigs in the United States in the June quarter of 2022 was significantly higher than the year-earlier quarter.
Baker Hughes also publishes monthly rig count data. The rotary rig count, issued by BKR, usually gets published in major newspapers and trade publications.
Baker Hughes’ data, issued at the end of every week since 1944, helps energy service providers gauge the overall business environment of the oil and gas industry. The number of active rigs compared with the prior-week figure indicates the demand trajectory for Baker Hughes’ oilfield services from exploration and production companies.
Quarterly Earnings to Surge
Amid the backdrop of increased oil prices and higher drilling activities, upstream energy companies are likely to have generated handsome earnings in the second quarter of this year. Per the latest
Zacks Earnings Trends report, the energy sector is likely to have generated earnings of $59.4 billion for the June quarter, indicating a massive improvement year over year. Key Releases
Given the backdrop, let us look at how the following energy companies are placed ahead of their second-quarter earnings releases slated for Aug 4.
Our proprietary model indicates that a company needs to have the right combination of two key ingredients — a positive
Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat. You can see . the complete list of today’s Zacks #1 Rank stocks here ConocoPhillips ( COP Quick Quote COP - Free Report) is geared up to release second-quarter earnings before the opening bell.
Our proven model predicts an earnings beat for ConocoPhillips this time around as it has an Earnings ESP of +1.21% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our
Earnings ESP Filter.
The Zacks Consensus Estimate for ConocoPhillips’ earnings is pegged at $3.78 per share, suggesting a massive improvement from the prior-year reported figure.
EOG Resources, Inc. ( EOG Quick Quote EOG - Free Report) is scheduled to report quarterly earnings after the closing bell. The chances of EOG Resources delivering an earnings beat this time around are low as it has an Earnings ESP of -7.79% and a Zacks Rank #2.
The Zacks Consensus Estimate for EOG Resources’ earnings is pegged at $2.99 per share.
Canadian Natural Resources Limited ( CNQ Quick Quote CNQ - Free Report) is scheduled to report quarterly earnings before the opening bell. The chances of Canadian Natural delivering an earnings beat this time around are high as it has an Earnings ESP of +0.84% and a Zacks Rank #3.
The Zacks Consensus Estimate for Canadian Natural’s earnings is pegged at $2.08 per share.
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