OIL PRICES TO BREAK RECORDS
Of the 10 most heavily traded U.S. stocks that hit new 52-week highs on the New York Stock Exchange during Aug. 3 trading, half of them were Houston-based oil and gas companies, according to Merrill Lynch. In that quintet was integrated energy company ConocoPhillips Co.; oilfield services providers Bakers Hughes Inc. and BJ Services Co.; and Burlington Resources Inc. and EOG Resources Inc., both independent oil and gas exploration and production firms.
Each of those five Houston companies has seen its share price surge at least 50 percent from its 52-week low.
On Aug. 3, Standard & Poor's underscored the independent equity research firm's bullish stance on the energy sector. In the same research note, Standard & Poor's analysts said they were adding BJ Services to the S&P Top 10 Portfolio of favorite stocks.
"The protracted rise in crude oil prices will continue to drive rising demand for BJ's pressure pumping services," according to S&P.
Shares of BJ Services jumped 65 percent from a 52-week low of $30.11 to the 12-month high of $50 during trading on Aug. 3. The stock ended the session at $49.60, up about 1 percent for the day.
BJ Services is a provider of pressure pumping and other oilfield services.
The main driver for the company's growth "continues to be the U.S. market, where we expect the rig count to remain at relatively high levels for the rest of the year," according to S&P analyst Stewart Glickman.
S&P trumpeted a five-star rating, the firm's most positive recommendation, on BJ Services shares.
Still, analysts at S&P apparently haven't forgotten that crude oil is a commodity that in recent years has spent significant time at around half its Aug. 3 price.
"Risks to our recommendation and target price include reduced demand for pressure pumping services, lower-than-expected cash flow from operations, and a sharp reduction in oil and natural gas prices," notes Glickman.
Still, on Aug. 3, energy dominated the most heavily traded-new 52-week high list on the New York Stock Exchange. The most heavily traded NYSE stock that reached a 52-week high that day was ExxonMobil Corp.
Not to be outdone, ExxonMobil rival ConocoPhillips closed up slightly at $79.03 per share on Aug. 3., after nearly touching $80. The third-largest U.S. energy company, ConocoPhillips has risen 53 percent from a 52-week low of $51.68. Shares of ConocoPhillips tote Houston's highest stock market capitalization.
Of course, in the energy business, such a sharp increase in such a short period of time is especially unusual for integrated oil and gas companies.
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