It was a week where oil prices briefly traded above the psychologically important $50 per barrel level for the first time since October though natural gas futures ended lower again.

On the news front, shareholders at Exxon Mobil Corp. (XOM Quick QuoteXOM - Free Report) voted down climate change proposals, while Suncor Energy Inc. (SU Quick QuoteSU - Free Report) announced plans to restart operations after the Fort McMurray fires in Canada.

Overall, it was a mixed week for the sector. While West Texas Intermediate (WTI) crude futures gained 1.9% to close at $49.33 per barrel, natural gas prices fell 1.7% to $2.169 per million Btu (MMBtu). (See the last ‘Oil & Gas Stock Roundup’ here: FMC Tech to Merge with Technip, Chevron Aims to Restart Gorgon.)

Oil prices moved north for the seventh time in 8 weeks on supply disruptions in Nigeria, France, Venezuela and Canada. Things were further helped by the U.S. Energy Department's weekly inventory release that showed a large drop in crude stockpiles. Additional support came from a Baker Hughes report that showed another decline in oil-directed rigs, indicating a break in shale drilling activities.

On the other hand, natural gas fared badly following a bearish inventory report. Meanwhile, predictions of mild temperatures across most parts of the country over the next two weeks will restrict the commodity’s requirement for power burn.

Recap of the Week’s Most Important Stories

1.    U.S. oil major Exxon Mobil has been relieved of the tremendous pressure to implement climate change policies, after its shareholders narrowly voted the resolutions down.

The policies, which necessitated limiting greenhouse gas emissions, reducing global warming, putting a climate expert on the board, reporting on fracking activities and even climate change impact assessments, were rejected at Exxon Mobil’s annual meeting.

Notably, this is first time in the company’s history that the climate-related proposals have received so much support. Initial results showed 38% support from Exxon Mobil investors that cast ballots. This is a sign that more conventional shareholders like pension funds, sovereign-wealth funds and asset managers are beginning to take the threat of a global warming from fossil fuels more seriously. (See More: Exxon Mobil Shareholders Reject Climate Change Resolutions.)

2.    Suncor Energy announced that its operations, which were halted due to the massive Canadian wildfire, have resumed.

The leading integrated player in Canada has restored its activities at its base plant and the MacKay River sites in Alberta. The initial production at the facilities will likely be started by this weekend.

Almost 4,000 employees and contractors of the company have returned to the areas. In fact, an additional 3,500 people will likely return to the region to shore up operations. This announcement shows that the oil sands’ producers of Canada are gradually coming back to operations following the outage caused by the latest wildfire.

3.    Europe’s largest energy firm, Royal Dutch Shell plc , has decided to reduce its headcount further. This time, the company will eliminate a minimum of 2,200 jobs this year, of which 475 workers are attached to exploration and production activities in the U.K. and Ireland.

Following this announcement, Shell is on the verge of slashing 5,000 jobs in 2016, while the total for 2015-16 will stand at 12,500. Energy companies around the world continue to slash jobs, defer/cancel projects worth billions of dollars and renegotiate contracts with suppliers to help protect their balance sheets and cope with ‘lower for longer oil.’

The contentious takeover of BG Group and integration of its business also contributed to the decision. (See More: Shell to Slash 2,200 More Jobs Amid Prolonged Oil Rout.)

4.    Offshore contract driller SeaDrill Ltd. (SDRL Quick QuoteSDRL - Free Report) reported weak first-quarter 2016 results owing to underperformances by Jack-up Rigs and Floaters. This was partially offset by decreasing operating expenses.

Net operating income for the Jack-up Rigs segment plummeted from the first-quarter 2015 figure of $325 million to $86 million, while for Floaters the net operating profit came in at $237 million, significantly below the prior-year quarter figure of $376 million. SeaDrill incurred operating expenses of $568 million in the reported quarter, reflecting a significant decline from the year-ago quarter figure of $731 million.

The company projects second-quarter 2016 operating income of almost $510 million, which is less than the first-quarter level of $528 million. (See More: SeaDrill Posts Weak Earnings in Q1, Revenues Lag.)

5.    British oil and gas finder BP plc (BP Quick QuoteBP - Free Report) has commenced a major water injection project at its Thunder Horse platform, one of the biggest deepwater fields in the U.S. Gulf of Mexico (GoM). Located in a water depth of 6,000 feet, the Thunder Horse platform commenced production in Jun 2008.

BP has revamped the platform’s existing topsides and subsea equipment over the last three years alongside drilling two water injection wells at the site. Water is expected to be injected into the reservoir from these wells to enhance pressure and augment production. Moving ahead, these developments are anticipated to help the Thunder Horse facility recover an extra 65 million barrels of oil equivalent. Thus, the water injection project will extend the production life of the platform.

Out of the five major upstream projects in 2016 that BP expects to commission, the aforesaid project is the second. BP intends to add new production of about 800,000 barrels of oil equivalent per day worldwide from projects commissioned between 2015 and 2020.

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 1.85% on supply outages. Consequently, investors witnessed a buying spree in most large companies. The best performer was offshore drilling giant Transocean Ltd. (RIG Quick QuoteRIG - Free Report) that added 7.83% to its stock price.

Longer-term, over the last 6 months, the sector tracker is down 1.31%. Downstream operator Tesoro Corp. was the main casualty during this period, experiencing a 31.87% price decrease.

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. Investors are also keenly looking ahead to the OPEC meeting scheduled in the Austrian capital of Vienna on Thursday, June 2.

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