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Energy firms Earn $316 Billion Since Oil Price Hit Floor In February

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The thirty-six energy firms on the Standard & Poor's 500 (S&P 500) list have gained US$316 billion in market value since West Texas Intermediate crude oil prices reached a record low of US$26.21 last February.

According to a USA TODAY analysis of data from S&P Global Market Intelligence, thirty-five firms have each posted individual gains over the past seven months.

Williams Energy, for instance, gained a whopping 130 percent for a market gain of just over US$13 billion since the WTI low point last February. Other firms posted percentage gains of at least 60 percent like Anadarko (79.1 percent), Pioneer Natural Resources (68 percent), and Halliburton (60.7 percent).

A pair of energy giants topped the list of strongest gainers with Chevron on the peak with an added US$36.2 billion since February, followed by Exxon Mobil with US$31 billion.

The collective gains by the energy companies on the S&P 500 also represent gains for energy stock investors seeking to rebound following the downturn in oil and gas prices. The Energy Select Sector SPDR exchange-traded fund (XLE) that follows the performance of large energy stocks is up 37 percent from its lows this year in January.

The price of WTI crude broke the US$50 per barrel mark on 6 October for the first time since June and has gained around 92 percent following the bottoming out in February. Numerous factors are behind the upturn including worry over the possible damage Hurricane Matthew could have over oil supplies in the southeastern United States. Furthermore, oil prices have risen steadily since members of the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil producers reached a deal last week to curtail production.

Related: The OPEC Deal Represents A Permanent Shift In Oil Markets

The apparent success of the accord obtained in Algiers could lead OPEC members to enact further cuts to output, claimed Algerian Energy Minister Nouredine Bouterfa.

“We will evaluate the market in Vienna by the end of November and if 700,000 barrels are not enough, we will go up. Now that OPEC is unified and speaks in one voice everything is much easier and if we need to cut by 1 percent, we will cut by 1 percent,” the minister said to the local press.

Venezuelan Oil Minister Eulogio Del Pino claimed earlier this week that the current level of production cuts could push the price of a barrel of oil from US$10 to US$15 per barrel above the average September price.

On the flipside, profits for energy firms are expected to fall concurrent with the rise in oil prices. USATODAY noted Chevron's adjusted profit is expected to tumble 63% this year to US$5 billion, but rebound by 174% in 2017 to US$13.8 billion.

By Erwin Cifuentes for Oilprice.com

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