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Msg  138400 of 139161  at  8/13/2022 9:02:50 AM  by

MikeyHorse


Energy & Utilities Roundup: Market Talk

 
 
Dow Jones Institutional News; New York [New York]. 12 Aug 2022.
 

The latest Market Talks covering Energy and Utilities. Published exclusively on at 4:20 ET, 12:20 ET and 16:50 ET.

1507 ET - Natural gas prices end the session 1.2% lower at $8.768/mmBtu but finish with an 8.7% weekly increase, putting an end to a streak of two consecutive weekly declines. The market's gains this week were partially driven by broader upticks among energy commodity peers, as oil and fuel prices increased on improved outlooks for demand and less talk of recession. But Europe's energy crisis also supported prices as investors believe global demand for US LNG exports is essentially equal to as much as US producers can possibly produce and ship out from limited infrastructure. Weather, meanwhile, has become less-bullish, though still mildly price supportive as Texas is still seeing bouts of triple-digit heat. (dan.molinski@wsj.com)

1443 ET - US benchmark oil prices finish the session 2.4% lower but end with a 3.5% or $3.08 weekly gain to $92.09 a barrel as improved prospects for US gasoline demand, and gas-to-oil switching at European power stations bode bullish for crude. WTI's hefty gains this week were also, in part, a reflexive move to weakness in the dollar after Wednesday's better-than-expected inflation data that altered interest rate expectations from the Fed. But the dollar rebounded strongly today, and that fueled some of oil's declines this morning, as oil prices are bought and sold in US currency. (dan.molinski@wsj.com)

1439 ET - Improving airline fundamentals in the second half of this year are expected to continue but a weakening global macroeconomic environment and persistent inflation could put the recovery at risk next year, Fitch Ratings says. "We expect the favorable supply/demand imbalance to sustain over the next 12 months absent greater macroeconomic pressure, supporting carrier pricing power and yields," Fitch says. The agency says it has a negative rating outlook for most U.S. airline carriers, "despite moderately brighter 2022 expectations based on recent operating results." Fitch says it could stabilize airline rating outlooks "amid evidence of demand stability or moderating fuel prices." However, "signs of softening industry demand/yields, faster than expected operating expense growth and weakening liquidity profiles are key factors that could generate negative ratings momentum," Fitch says. (stephen.nakrosis@wsj.com)

1347 ET - The number of active, oil-targeted rigs in the US climbs by three in the latest week to 601, an increase that fits a recent trend of slower activity growth for the drilling sector amid lower oil prices and stubbornly-high overall inflation. The oil rig-count total has risen by just two rigs over the past four weeks. Natural gas rigs fall by one rig to 160, Baker Hughes says. WTI crude prices remain lower, down 2.2% at $92.23 a barrel, hurt by a strong dollar and a resumption of some offshore oil production in the Gulf of Mexico after several shut-ins yesterday due to a pipeline leak. (dan.molinski@wsj.com)

1339 ET - An Iranian tanker is being reloaded with 56,000 tonnes of crude off the Greek Port of Piraeus, three months after the shipment was confiscated by US authorities. The tanker is expected to sail in a couple of days after a Greek court ruled that the US seizure was unjustified. The release raises hopes that two Greek owned tankers held by Iran in retaliation for the American move would soon be released. The Iranian tanker was stopped north of Athens by the Greek coast guard in May after Washington said it was breaking oil sanctions against Tehran. (costas.paris@wsj.com)

1207 ET - The New York State Common Retirement Fund says it's reviewing 28 publicly traded integrated oil and gas companies to determine if they are ready for the transition to a low-carbon economy, as the third-largest US public pension fund pushes toward a net-zero carbon emissions goal for its portfolio. The fund has nearly $2.5B invested in the 28 companies, which include such energy giants as Exxon Mobil, BP, Chevron and Shell. The $272B fund in late 2020 pledged to reach net-zero greenhouse-gas emissions across its portfolio by 2040 and said it would ramp up efforts to encourage corporations to reach net zero faster. Previous reviews of shale oil and gas, oil sands and coal companies led the fund to dump its holdings in 55 companies. (colin.kellaher@wsj.com)

1145 ET - Chevron, one of several offshore oil producers in the Gulf of Mexico that were forced to shut in some production due to pipeline leaks at a connector station in Louisiana operated by Shell, says Shell has fixed the leak at the Amberjack pipeline. As a result, "Chevron is in the process of ramping up production at our Jack/St. Malo, Tahiti, and Big Foot platforms," the California-based company says in an email. Another pipeline, Mars, was also leaking and was being repaired, but it's unclear if Shell has fixed that pipeline as well. Shell had to shut in three of its oil production platforms due to the leaky pipelines, and Norway's Equinor had to shut its Titan platform. (dan.molinski@wsj.com)

1020 ET - Several offshore oil production platforms in the Gulf of Mexico remain shut while Shell works to repair a pipeline that sprung a leak at the Fourchon booster station on land along the Louisiana coast. Shell expects the pipeline to be fixed by today, and says that meanwhile three of its platforms, Mars, Ursa and Olympus, are all halted. Norway's Equinor tells WSJ its Titan platform has also been shut. "Production from Titan is minor, less than 2,000 boepd on average," spokesperson Ola Morten Aanestad tells WSJ. Chevron has reportedly also had to shut-in platforms due to the same pipeline leak. Temporary shut-ins can usually be negated quickly as companies over-pump once they restart. (dan.molinski@wsj.com)

0944 ET - The global benchmark Brent is trading at a much-larger-than-normal $6 premium to the US benchmark WTI ($98 vs $92), and that's generating cause-and-effect speculation. "There is a lot of market talk about Asia buying up cheap barrels of US crude because the spread between US and Brent and Asia prices are wide," Phil Flynn at Price Futures says in a note. "The reason the US West Texas prices are lower is that Biden decided to release a record amount of oil from our SPR while Saudi Arabia raised prices. The plan from Saudi Arabia may be to encourage the US to drain their inventories so that they will have greater control over global oil prices when supplies are tight." (dan.molinski@wsj.com)

0856 ET - Natural gas prices in the US fall 1.6% to $8.735/mmBtu after prices surged yesterday to a two-week-high near $9 and put the market within striking distance of a 14-year-high of $9.322 reached on June 6. Investors largely priced out of the market all of the bearish influences from the June 8 shutdown of the Freeport LNG plant in Texas as extremely hot weather in July provided a bullish offset. Additionally, Freeport says it aims to return toward normal LNG exports as early as October. Increased concerns about Europe's natural gas-focused energy crisis is also putting bullish sentiment back into the US market. (dan.molinski@wsj.com)

0851 ET - While Norway isn't directly in the firing line from the reduction in Russia's gas exports, it has now got its own problems with low water levels in hydropower reservoirs, Capital Economics economist Jessica Hinds says in a note. Most of Norway's electricity is generated using hydropower and unusually dry weather this year has meant water levels in reservoirs are very low. "This may add a bit to Norway's electricity inflation and restrict Norway's electricity exports," she says. Electricity exports to Germany and the Netherlands are small, but these countries may find themselves scrambling to plug the shortfall at a time when other key electricity exporters such as France are struggling to keep nuclear capacity online, she adds. (dominic.chopping@wsj.com)

0637 ET - Nel's sharper Ebitda losses and lower revenue growth in the second quarter leads Citi to reduce its 2022 estimates, but good order dynamics in 2Q subsequently leads the bank to forecast a catch up in growth in 2023-2024, analyst Vivek Midha says in a note. In the medium term, the Norway-based hydrogen company can be a beneficiary of strong trends in both the European and U.S. markets, given strong political trends and its presence in both markets, he adds. "Our updated forecasts regarding long-term market growth drive a rise in our target price to NOK16 from NOK14," Midha says. Citi has a neutral rating on the stock. (dominic.chopping@wsj.com)

(END)

August 12, 2022 16:50 ET (20:50 GMT)



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