NEW YORK, NY--(Marketwire - Nov 5, 2012) - Abundant supplies and concerns regarding the health of the global economy have sent oil prices on a steady decline since around mid-September. Last week oil hit a three-month low as missed earnings from major industrial companies pressured prices lower. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) has gained just 1 percent year-to-date. Five Star Equities examines the outlook for companies in the Oil & Gas Industry and provides equity research on BP plc (
Oil prices have fallen approximately 13 percent this year. Oil futures, which haven't closed below $86 since mid-July, fell to a low of $84.86 a barrel last week. Weak outlooks recently provided major companies such as Caterpillar, DuPont, and 3M have raised concerns that the global economy is weakening, which could further reduce demand for oil. The Energy Information Administration earlier this month reported that oil production in the U.S. was at a 15 year high, despite lower demand.
"There is a correlation between the equity markets and the oil price," said CMC Markets analyst, Michael Hewson. "We've had various companies missing price forecasts and these concerns about the future outlook for earnings are keeping a lid on oil prices."
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A $12 billion expansion plan at BP's Tangguh liquefied natural gas project has been recently approved by the Indonesian government. The plan calls for the building of a third liquefaction train, which would increase liquefaction capacity to 11.4 million tons a year.
Suncor Energy recorded third quarter 2012 operating earnings of $1.303 billion, compared to $1.789 billion for the third quarter of 2011. The company has narrowed its 2012 oil sands production forecast. Oil Sands production contributed an average of 341,300 barrels per day in the third quarter of 2012.
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