The recent market calm for energy stocks is being shattered by an outright meltdown in crude oil, which has crashed to a four-month low to test the $39-a-barrel handle. The decline, which has pushed the United States Oil Fund LP (ETF) (NYSEARCA:USO) down nearly 25% from its early June high, is being driven by the reappearance of oversupply fear and concerns over bulging inventories.
The rumors of an OPEC-Russia supply freeze deal that boosted energy prices earlier in the year came to not. And with U.S. shale oil producers responding to a rebound in prices by increasing drilling activity, it’s no surprise that the black stuff is on the skids again.
While U.S. equities in general are resisting the selling pressure, energy stocks are taking it straight on the chin after many reported disappointing earnings last week.
Here are eight energy stocks that look ready to drop hard.
Energy Stocks on the Verge of Collapse: BP plc (ADR) (BP)
BP plc (ADR) (NYSE:BP) shares have dropped below their 50-day moving average for the first time since late June, down some 10% from their July high. Investors were disappointed with the company’s second-quarter results last week, despite earnings of 23 cents per share beating the five-cent consensus estimate. Revenues fell 25.7% to $46.44 billion, below the $48.69 billion analysts were expecting.
The company will report its next results on Oct. 25 before the bell. Analysts are looking for earnings of five-cents per share on revenues of $55 billion.
Energy Stocks on the Verge of Collapse: Chevron Corporation (CVX)
Chevron Corporation (NYSE:CVX) shares have fallen to test the lower end of its five-month trading range near $100. The company reported mixed results on July 29, missing on revenues, which fell 27% from last year to $29.3 billion. The results also included one-time charges totaling $2.8 billion.
The company will next report results Oct. 28 before the bell. Analysts are looking for earnings of 63-cents per share on revenues of $38.8 billion.
Energy Stocks on the Verge of Collapse: Exxon Mobil Corporation (XOM)
Exxon Mobil Corporation (NYSE:XOM) shares are falling hard through last week’s lows on Monday, in what looks like a looming test of its 200-day moving average not touched since February. The company reported a top- and bottom-line miss last week, with earnings of 41 cents per share missing expectations for 64 cents on a 22% drop in revenue to $57.7 billion.
The company will next report results on Oct. 28 before the bell. Analysts are looking for earnings of 89 cents per share on revenues of $75.4 billion. The August $94 XOM puts recommended to Edge Pro subscribers are up a whopping 314% since recommended on July 21.
Energy Stocks on the Verge of Collapse: ConocoPhilips (COP)
ConocoPhillips (NYSE:COP) shares look ready to drop down and out of a four-month consolidation range and remain below their 50-day and 200-day moving averages. The company reported a top- and bottom-line miss on Friday, with a loss of 79 cents per share reported on a 36% year-over-year drop in sales.
The company will next report results on Oct. 27 before the bell. Analysts are looking for a loss of 44-cents per share on revenues of $9.2 billion. The August $41 COP puts recommended to Edge Pro subscribers are up 55% since recommended on July 21.
Energy Stocks on the Verge of Collapse: Royal Dutch Shell plc (ADR) (RDS.A)
Royal Dutch Shell plc (ADR) (NYSE:RDS.A) shares have fallen below their 50-day moving average and are down more than 10% from their July high as a test of support near $48 looks likely. Last week, the company reported weaker-than-expected earnings of 13 cents per share (vs. 27 cents expected) on a 19.3% drop in revenues to $58.4 billion.
On Monday, analysts at RBC Capital Markets downgraded the stock on a cloudy risk outlook and debt concerns. The company will next report results on Nov. 1 before the bell. Analysts are looking for earnings of 35 cents per share on revenues of $57.8 billion.
Energy Stocks on the Verge of Collapse: Occidental Petroleum Corporation (OXY)
Occidental Petroleum Corporation (NYSE:OXY) is barely hanging onto support from its five-month consolidation range near $74 as pressure builds against energy stocks. The comes despite some positive commentary on the stock by Barron’s and rumors the company could be a buyout target for XOM.
The company will next report results on Aug. 3. Analysts are looking for a loss of 19 cents per share on revenues of $2.8 billion.
Energy Stocks on the Verge of Collapse: Halliburton Company (HAL)
Halliburton Company (NYSE:HAL) shares are testing three-month consolidation range support near $42, that in turn, has capped a seven-month long uptrend out of February lows. The company reported a loss of 14 cents per share on July 20, slightly ahead of expectations, on a 35% drop in revenues.
The company will next report results on Oct. 19 before the bell. Analysts are looking for a loss of 7-cents per share on revenues of $3.9 billion.
Energy Stocks on the Verge of Collapse: Marathon Oil Corporation (MRO)
Marathon Oil Corporation (NYSE:MRO) shares have been resting on support at its 200-day moving average for the last two weeks after falling below its 50-day average. A breakdown here would mark the end of the post-February uptrend and put the March/April range near $10 in play — a 23% drop from here.
The company will next report results on Aug. 3 after the close. Analysts are looking for a loss of 25 cents per share on revenues of $1.1 billion. The August $13.50 MRO puts are up 46% for Edge Pro subscribers since they were recommended on July 26.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.
