Today's Energy and Materials Recap
Crude oil futures are down $0.59 to $91.89, continuing the slide since Monday's open. At the same time, natural gas futures continue their run upward today, gaining $0.048 to rise to $3.528.
Agriculture commodities for the most part ticked up on the day, with corn rising $2.00 to $758.75 and coffee up $4.20 to $182.25.
Pundits continue to chatter about the looming presidential debate and each candidate's energy policies. Overall, the energy sector should prosper under either party, with certain sectors likely performing better than others. President Obama wants to continue the successful rise in U.S.-based production that has taken place over the last four years, but he would also push for more energy generated by renewables (wind, solar, hydro) if he were to be reelected. Under Gov. Romney federal lands would take center stage, as he proposes a boost in access to public lands for oil and gas companies. This is largely perceived to benefit oil players more than natural gas ones, because most gas reserves have been located on private land. Should the price of gasoline come down as a result of increased oil production on federal land, then natural gas could become subject to additional pricing pressures.
Oil and gas services company Core Laboratories (NYSE: CLB) is down significantly on the day (17.09%) due to a drastic reduction in 3Q2012 expectations. Management revised their 3Q guidance based on Baker Hughes' (NYSE: BHI) rig count report. The report stated that U.S. land rigs in operation fell by 6%, while Canadian land rigs fell much more precipitously by 30%. Its new EPS range estimate comes in at $1.09-$1.13, down from $1.17-$1.25. These earnings figures stem from its revised revenue projections of $240 million-$245 million; the previous revenue guidance was $250 million-$260 million.
Agricultural stocks are down as a group, largely in part to Mosaic (NYSE: MOS) missing Wall Street earnings estimates by 13.9%. Based on consensus, Mosaic should have earned $1.15/share, while it only reported $1.01. Overall net income fell 18% from the previous year to $429.4 million, stemming from a 19% year-over-year drop in sales to $2.51 billion. As of 3:15pm, Mosaic is trading down 4.5%, followed by PotashCorp (NYSE: POT) and CF Industries Holdings (NYSE: CF) , which are down 2.7% and 1.6%, respectively.
With both presidential candidates on board with producing more domestic oil, these three stocks could benefit from an increase in domestic exploration and production. Take a look at our special free report for a deeper dive into each one, along with the energy sector as a whole.