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The Zacks Oil and Gas – International E&P industry consists of companies based outside the United States and Canada focused on exploration and production (E&P) of oil and natural gas. These firms are engaged in finding hydrocarbon reservoirs, drilling oil and gas wells, and producing and selling these materials to be refined later into products such as gasoline. Let’s take a look at the industry’s three major themes: There is increasing evidence that a fundamental change is occurring in the oil market. Brent crude, the international benchmark, popped above $85 a barrel and was trading at multiyear highs in early October. A looming shortage of the commodity on Iran sanctions helped in driving oil prices higher. Now, in a reversal, oil is facing a two-pronged attack: rising supply from major producers and fear that an economic slowdown will dampen the outlook for demand. Oil’s troubles pushed the index into a bear market, leading to a 20% drop from recent highs. While the future direction of crude’s movement is anybody’s guess, it might be prudent for investors to maintain caution in these uncertain times — either withdraw for a while or look for fundamentally sound stocks. Meanwhile, natural gas prices […]
