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Msg  137926 of 139055  at  7/10/2022 8:30:09 AM  by


Energy & Utilities Roundup: Market Talk


Dow Jones Institutional News; New York [New York]. 09 July 2022.
The latest Market Talks covering Energy and Utilities. Published exclusively on at 4:20 ET, 12:20 ET and 16:50 ET.

2056 GMT - Canadian stocks fall slightly, with the benchmark S&P/TSX Composite Index ticking down and the blue-chip S&P TSX 60 Index both slipping 0.2% to 19022 and 1155, respectively. The S&P/TSX Index was weighed down by companies in the energy sector. Crescent Point Energy leads the group with a decline of 3% to C$9.15. (; @pennedbyden)

1925 GMT - WTI futures close the day 2% higher, but down 3.4% for the week, at $104.79 a barrel. The US benchmark is down three of the past four weeks and off 15.3% from its 52-week high recorded in March. Markets watch for next week's OPEC monthly report on Tuesday for an update on supply and demand. EIA data are also expected to impact the trade, as markets gauge how rising prices and interest rates are affecting the economy. "The EIA Weekly Storage Report will be out on Wednesday, and I would expect a big draw in crude oil storage," Mizuho's Robert Yawger says in a research note. (; @ptrevisani)

1825 GMT - A slew of new infrastructure projects to move natural gas from the Permian basin means that what "looked like an impending gas takeaway crisis just a few months ago now appears much more balanced with minimal risk of basis widening," Wells Fargo analysts say in a research report. They still expect "pockets of tightness in 2023," but longer-term they see "the risk of overbuild if a large-scale project reaches FID [final investment decision]." The analysts think that, beyond 2026 there could be "the need for 700 MMcf/d of additional de-bottleneck production growth over the next five years, which supports FID of a small expansion." (; @ptrevisani)

1718 GMT - The number of active, oil-targeted rigs in the US increases by two rigs in the latest week to 597, according to oilfield services company Baker Hughes. The increase extends a slow patch for rigs activity, following an increase by only one the week before. Before that, as many as ten active rigs had been added in a week, as the industry recovered from the pandemic depths. Active natural-gas rigs were unchanged at 153 in the latest week, Baker Hughes says. WTI crude prices shows little reaction to the rigs data and rise 2% to $104.92. (; @ptrevisani)

1630 GMT - Amid soaring commodity prices, energy activity in the middle of the US accelerated in the 2Q, and expectations for future activity remained strong, according to the Federal Reserve Bank of Kansas City's quarterly survey. The quarterly Tenth District Energy Survey's key index of drilling and business activity comes in at 57 for the quarter, up from a 1Q reading of 29 and the highest level since December 2016, as quarterly indexes for revenue, number of employees, and wages and benefits tally their best readings since the survey began in 2014. Readings above zero indicate expansion. The survey's future drilling and business activity index jumps to 50 from 1Q's 42, with expectations for future revenue rising at a faster pace. (

1504 GMT - Aker BP could return more cash to shareholders, JPMorgan says, upgrading its recommendation on the Norwegian oil exploration, development and production company to overweight from neutral. The company has a strong balance sheet, a line-up of several major growth projects and no need to buy assets, having acquired Lundin Energy's exploration & production business, JPM says. The company therefore has potential to return more funds to investors in dividends, the U.S. investment bank says. "Aker BP has been caught in the sector-wide sell-off in recent weeks, which we believe is overdone," JPM analyst James Thompson says in a note, raising JPM's price target on the stock to NOK407 from NOK343. Shares rise 1.8% to NOK331. (

1300 GMT - Shareholder returns are likely to be a focus for investors in first-half results from oil & gas companies, Jefferies says. Recession fears and commodity-price volatility are limiting investor interest in exploration & production despite high percentage free cash-flow yields, but increased direct shareholder return announcements in recent weeks are creating a new investment angle for a sector with much-improved balance sheets, Jefferies says. "Balance-sheet deleverage and increasing direct shareholder returns will be a feature of interim results," Jefferies analysts say in a note. The brokerage upgrades Capricorn Energy and Energean to buy from hold. (

1255 GMT - While the Orsted 1H results announcement itself is expected to be largely uneventful given the broadly average wind speeds in 1H and the lack of disposal gains during 2Q, focus of the call is likely to be on Orsted's growth opportunities through potential acquisitions, and more importantly how they are funded, Citi analysts Jenny Ping and Rory Graham-Watson say in a note. "In our view, fundamentals of offshore wind projects remain challenging, given the extreme level of competition for such projects, as well as inflationary cost pressures, both of which should continue to weigh on returns." UBS continues to be cautious on Orsted, given its premium valuation and risk of equity raise. It rates the stock at sell with a DKK688 target price. (


July 09, 2022 04:20 ET (08:20 GMT)

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