Energy Stocks Take a Breather This Week

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Image Source: Marathon Oil.

After a meteoric rise from the mid-$20s to more than $40 a barrel, crude took a breather this week ending down 4% and below $40 a barrel. That took energy stocks down with it, with dozens dropping double digits this week, giving up a portion of their recent gains. According to S&P Capital IQ data, some of the worst-performing energy stocks this week were California

Resources (NYSE: CRC), Marathon Oil (NYSE: MRO), Dorian LPG (NYSE: LPG), Denbury

Resources (NYSE: DNR), and Bristow Group (NYSE: BRS). 

What:Marathon Oil (NYSE: MRO) slumped 10.1% this week.

So What: Key driver: Crude oil gives back

recent gains After hitting bottom last

month, crude oil had risen sharply in March before topping out this week

That initial rally sent oil stocks rocketing higher, with Marathon Oil up 40% over the past month

Now What: That said, a much worse-than-

expected oil inventory number stopped that rally in its tracks, sending crude down 4% this week

That let the air out of Marathon’s recent rally

Key takeaway: Investors are taking a breather after the monster rally off the bottom

What:Bristow Group (NYSE: BRS) dropped 12.3% this week.

So What: Key driver: The crude oil

breather Bristow, likewise, fell alongside

oil prices this week giving back some of its recent gains

Still, after slumping more than 12% this week the stock is up more than 21% over the past month

Now What: Investors are beginning to

be hopeful that the bottom has been hit and that the oil market can finally start to heal

Key takeaway: Despite the relief rally, investors realize that oil has a long way to go before it will improve Bristow’s fortunes

What:

Denbury Resources (NYSE: DNR) fell 13% this week.

So What: Key driver: The oil price

breather Denbury has been a big

beneficiary of the bounce off the bottom with its stock more than doubling over the past month

That said, with oil giving back some of its gains, so is Denbury, though its still up 137% in just the past month

Now What: While oil around $40 a barrel

will help Denbury’s cash flow, it still needs much higher oil prices later this year, which is when its lucrative oil hedges start to roll off

Key takeaway: Investors know that oil has a long way to go before Denbury is in the clear

What:Dorian LPG (NYSE: LPG) fell more than 21% this week.

So What: Key driver: An analyst

downgrade UBS downgraded Dorian from

buy to neutral citing a downturn in the liquefied petroleum gas shipping market that was steeper than expected

It also cut its price target from $19 to $12.50

Now What: UBS also lowered its net asset

value estimate for the company, reflecting the declining asset values given the weakening environment

Key takeaway: Analysts and investors don’t see much upside in the near-term because of an increase in the supply of ships and the currently weak commodity price environment

What:California Resources (NYSE: CRC) slumped over 30% this week.

So What: Key driver: The oil price

breather Few oil companies have enjoyed

the recent oil price rally more than California Resources, which at one point had soared 550% from its bottom

Still, even after this week’s 30% drop, it’s up a remarkable 313% over just the past month

Now What: Despite that rally, the

company needs much higher oil prices in order to support its large debt load

Key takeaway: Investors know that this company isn’t out of the woods just yet

This could be the next billion-dollar iSecret