Like any other oil-stock, EP Energy Corp (NYSE:EPE) too witnessed a higher sell-off in its last trading session. The oil stocks led the broader market weakness after the U.S. crude oil sunk below a level of $40 a barrel, but later trimmed losses.
Broader market weakness
As the Organization of the Petroleum Exporting Countries (OPEC) are scheduled to meet on Friday, the volatility in the oil-based stocks is likely to continue. The oil prices inched up marginally in response to a report that indicated that Saudi Arabia might strike a deal to balance the oil markets. The producer’s unwillingness to support the cut in oil production is blamed for oil price slide since June 2014.
An Energy Intelligence report cited a senior OPEC delegate and signalled that Saudi Arabia is likely to propose oil output cut by 1 million barrels per day. Though the report gave fresh hope to the oil-based companies and market, a greater assurance is required, according to a chief market analyst.
A ray of hope
While the market is looking at a possibility for Saudi Arabia to act, it will be difficult to get all the parties agree to contain or cut their oil output. According to some market experts, Saudi Arabia will not cut production if Iran, Iraq, as well as other OPEC members continue with their existing production rate. In such a scenario, an agreement is expected to reach only by next year, stated the Energy Intelligence report. OPEC members’ decision to maintain a high output of oil as a strategy to keep competition off from Russia and U.S. oil producers has driven the oil price to half.
EP Energy Corp (NYSE:EPE) had last reported its quarterly results in October, where it delivered earnings per share of $0.26, surpassing the market consensus by $0.06. The stock price of the company fell steeply by 9.14% to $5.12 during yesterday’s trade.