SHARES in Weir Group have plunged nine per cent after the engineering giant said sales in the key US oil and gas market had slowed in recent weeks.
Glasgow-based Weir received a boost from the upturn in the North American oil and gas market in the first half as the rally in the crude price encouraged firms to increase activity in US shale areas.
The company said yesterday North American oil and gas market conditions were in line with management expectations through to mid-August.
Regarding the last two weeks of August, Weir added: “There was a considerable softening in demand for original equipment and some order book delivery deferrals.”
The update may spark concern the recovery in oil and gas market activity could be fading.
Barclays analyst Lars Brorson, noted recent updates from US oil services giants Schlumberger and Halliburton had indicated activity levels in the Permian Shale in the US had dropped off materially in recent weeks.
“That is set to adversely impact Weir’s high margin pressure pumping business in H2,” wrote Mr Brorson.
He added: “We don’t think the investment case for Weir’s pressure pumping business is broken.” The oil price remains supportive and the number of wells drilled in the US is increasing. Weir shares closed down £1.54 at £16.32.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here