PetroChina Rallies on Rising Oil Prices Despite $2.3 Billion Loss in Q1
China's largest oil and gas producer PetroChina Co. Ltd. (NYSE: PTR) reported its loss in the first quarter on Wednesday, but its stock rose on an increase in oil prices.
The China-based company focused on producing oil and gas said revenues in the first quarter reached 509 billion yuan($73 billion), down 17% year-over-year. Its net loss hit 16 billion yuan($2.3 billion) in the first quarter, compared to a net profit of 10 billion yuan ($1.4 billion) last year.
Despite the results, the company saw its shares enjoy a run-up of more than 2% as West Texas Intermediate, the main U.S. price gauge, jumped over 33% to $16.54 a barrel Wednesday morning.
PetroChina said in a statement that the company increased its oil and natural gas equivalent output by 6.1% year on year, totaling 414 million barrels.
The company processed 277 million barrels of crude oil in the first quarter, down 10% from one year ago. The production of refined oil products of the company reached 25 million tons, representing a drop of 14% from one year ago.
PetroChina still posted profits of 14.9 billion yuan($2 billion) in the first quarter for its exploration and production segment, up 4% from the same period last year.
Other producers in North America are less lucky. Players from Alberta, Canada to Midland, Texas, however, are racing to shut off oil wells in mid-April. Texland Petroleum LP said it will shut nearly 1,200 oil wells and cease production by May, according to The Wall Street Journal.
Wednesday's oil price boost followed news that U.S. inventories are lower-than-expected, shrinking the demand-supply gap.
According to the data from the U.S. Energy Information Administration, for the week ending April 24, crude stockpiles rose by 9 million barrels from the previous Factset's estimation of 11.7 million barrels.
Looking ahead, New York-based rating company Moody's gave a price target for WTI at $30 per barrel in 2020 and $40 next year. PetroChina did not give specific revenue guidance but emphasized cost-cutting measures.
"Looking ahead to the remaining three quarters of 2020, affected by the downturn of the world economy, the supply of global oil market is expected to remain excessive, and the global oil price is expected to fluctuate at a low level," PetroChina said in the statement.
Shares in PetroChina traded at $36.53 per share Wednesday morning, up 2%.