Renewable- and solar-energy stocks skirt sector's selloff# Stock
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Published: Nov 4, 2014 12:24 p.m. ET
SAN FRANCISCO (MarketWatch) — Energy stocks led a Tuesday decline in U.S.
stocks, dragged down by multiyear lows in oil futures prices precipitated by
news that Saudi Arabia, the world’s No. 1 oil exporter, had cut the price
of oil sold to the U.S.
That added pressure on smaller U.S. producers as it calls into question
those producers’ ability to withstand a long slump in prices and a direct
face-off with Saudi Arabia. In most cases, the Saudis can extract oil more
cheaply than U.S. counterparts — some of which rely on so-called
unconventional oil and gas production such as “tight” oil from shale
formations and from ultradeep offshore wells.
Top energy decliners on Tuesday included Denbury Resources Inc. DNR, -6.47%
with shares off 7%, while shares of Cimarex Energy Co. XEC, -3.95% fell 5.1
% and Pioneer Natural Resources Co.shares PXD, -3.86% fell 4.8%. “Big Oil
” shares fared better, with Exxon Mobil Corp. XOM, -0.59% shares down 1.3%
and Chevron Corp. shares CVX, -0.82% declining 1.4%.
The heft of those large, integrated oil companies works in their favor —
such companies cast a wide net for their oil and gas, and also profit from
refining, oil and gas storage and transportation, and other lines of
businesses not strictly dependent on domestic production.
“Saudi Arabia is now concentrating more on defending its market shares on
the U.S. market, which could pose a problem in particular for Canada, Mexico
and Venezuela ... and for U.S. shale-oil producers,” analysts at
Commerzbank said in a note Tuesday.
Saudi Arabia’s move came three weeks before the Organization of the
Petroleum Exporting Countries convenes in Vienna for a regularly scheduled
meeting. Wall Street had watched for signs that OPEC members would seek to
put a floor under oil futures, which have lost a quarter of their value from
a peak in June, by cutting production.
Oil futures traded in New York hit their lowest intraday levels in three
years.
Solar- and renewable-energy stocks mostly tracked U.S. equity markets lower.
Investors were also spooked Tuesday by the European Commission’s slashing
of growth forecasts for Europe.
Shares of solar installer SolarCity Corp. SCTY, -3.18% fell 3.5%. SolarCity
, the top U.S. residential solar installer, is scheduled to report third-
quarter results on Wednesday.
The exception among renewable-energy stocks was Plug Power Inc. PLUG, +2.14%
which makes fuel-cell-powered equipment. Shares were up 3.3% after rising
nearly 10% on Monday. Plug Power last week announced a deal to provide fuel-
cell warehouse equipment, such as lift trucks, to Golden State Foods, a
distributor to fast-food restaurants.
SAN FRANCISCO (MarketWatch) — Energy stocks led a Tuesday decline in U.S.
stocks, dragged down by multiyear lows in oil futures prices precipitated by
news that Saudi Arabia, the world’s No. 1 oil exporter, had cut the price
of oil sold to the U.S.
That added pressure on smaller U.S. producers as it calls into question
those producers’ ability to withstand a long slump in prices and a direct
face-off with Saudi Arabia. In most cases, the Saudis can extract oil more
cheaply than U.S. counterparts — some of which rely on so-called
unconventional oil and gas production such as “tight” oil from shale
formations and from ultradeep offshore wells.
Top energy decliners on Tuesday included Denbury Resources Inc. DNR, -6.47%
with shares off 7%, while shares of Cimarex Energy Co. XEC, -3.95% fell 5.1
% and Pioneer Natural Resources Co.shares PXD, -3.86% fell 4.8%. “Big Oil
” shares fared better, with Exxon Mobil Corp. XOM, -0.59% shares down 1.3%
and Chevron Corp. shares CVX, -0.82% declining 1.4%.
The heft of those large, integrated oil companies works in their favor —
such companies cast a wide net for their oil and gas, and also profit from
refining, oil and gas storage and transportation, and other lines of
businesses not strictly dependent on domestic production.
“Saudi Arabia is now concentrating more on defending its market shares on
the U.S. market, which could pose a problem in particular for Canada, Mexico
and Venezuela ... and for U.S. shale-oil producers,” analysts at
Commerzbank said in a note Tuesday.
Saudi Arabia’s move came three weeks before the Organization of the
Petroleum Exporting Countries convenes in Vienna for a regularly scheduled
meeting. Wall Street had watched for signs that OPEC members would seek to
put a floor under oil futures, which have lost a quarter of their value from
a peak in June, by cutting production.
Oil futures traded in New York hit their lowest intraday levels in three
years.
Solar- and renewable-energy stocks mostly tracked U.S. equity markets lower.
Investors were also spooked Tuesday by the European Commission’s slashing
of growth forecasts for Europe.
Shares of solar installer SolarCity Corp. SCTY, -3.18% fell 3.5%. SolarCity
, the top U.S. residential solar installer, is scheduled to report third-
quarter results on Wednesday.
The exception among renewable-energy stocks was Plug Power Inc. PLUG, +2.14%
which makes fuel-cell-powered equipment. Shares were up 3.3% after rising
nearly 10% on Monday. Plug Power last week announced a deal to provide fuel-
cell warehouse equipment, such as lift trucks, to Golden State Foods, a
distributor to fast-food restaurants.