3 Oil and Gas Shares Rising Fast
LONDON -- Oil prices rose through the first part of the week before following stock markets down again after President Obama's reelection was confirmed. When U.S. markets opened on Friday, Brent crude on the December contract was up by 1.2% on the week at $107.01 per barrel, while WTI crude was 0.6% up on the week at $85.06 per barrel. U.S. Natural gas prices have remained range-bound all week, and gas for December delivery was up by 1% at $3.55/mmbtu.
Many investors prefer to invest in commodity ETFs rather than directly in commodity futures, and the United States Oil Fund (NYS: USO) was almost unchanged this week, down 0.13% at $31.37 shortly after U.S. markets opened on Friday. The United States Natural Gas Fund (NYS: UNG) was up by 0.19% at $20.89.
The very nature of oil and gas companies means they can succeed or fail regardless of oil prices. This week's risers have all outperformed the price of oil by a big margin.
Coastal Energy (ISE: CEO.L) has gained 16% to 1,365 pence this week after the company confirmed it was discussing the sale of the business to Indonesia's state-owned oil company, Pertamina. Coastal's share price has risen 44% over the last six months -- and by a massive 1,037% over the last five years! -- as its reserves and production output have grown, demonstrating the big gains available if you invest in a successful oil and gas company at an early stage.
Bowleven (ISE: BLVN.L) has climbed 10% to 82.5 pence this week on news that it has formed a strategic alliance with Petrofac to develop its Etinde Permit off the coast of Cameroon. Oil services company Petrofac will provide the expertise required to develop Etinde, along with up to $500 million of funding, in exchange for a share of future revenues.
Shares in EOG Resources (NYS: EOG) are up 5% to $115.50 this month, helped by an upbeat earnings release on Monday in which the company revealed that oil production rose by 45% in the third quarter. In a call with analysts, EOG's CEO confirmed the company's plan for 2013 was to cut capital expenditure on loss-making natural gas operations and continue a shift in focus to liquids production, which is more profitable for the group. In common with many of its peers, EOG is struggling to make money from U.S. natural gas, as gas prices remain extremely low.
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