Energy & Utilities Roundup: Market Talk

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

0158 GMT - Singapore stocks are expected to benefit from the country's market reforms, four members of Morgan Stanley's Research team say in a note. "New measures to strengthen Singapore's equities market will be announced in phases through 2025, likely delivering a much needed boost to trading liquidity and valuation multiples," they note. The U.S. investment bank's December 2025 target for MSCI Singapore Index target of 1900 implies a total return of 16% over the next 12 months. Morgan Stanley's 'Singapore Focus List' includes Singapore Exchange, UOB, Singtel, Sembcorp Industries, and CapitaLand Investment, and has overweight ratings for all four names. Morgan Stanley's target prices for Singapore exchange is S$14.31, UOB is S$36.80, Singtel is S$3.90, Sembcorp Industries is S$7.20 and CapitaLand Investment is S$3.95. (ronnie.harui@wsj.com)

0131 GMT - Oil edges higher in Asia's morning trade on supply outage concerns and geopolitical risks. Production at the Johan Sverdrup field in Norway, which produces up to 755,000 barrels of oil per day, was halted due to power outage, ING's commodities strategists say in a note, adding that there was a decline in production at the Tengiz field in Kazakhstan as well. Moreover, geopolitical risks between Russia and Ukraine have risen after the U.S. said it would allow Ukraine to conduct long-range missile strikes on Russia, they add. Front-month WTI crude oil futures are 0.1% higher at $69.23/bbl; front-month Brent crude oil futures are 0.1% higher at $73.36/bbl. (ronnie.harui@wsj.com)

1909 GMT - Crude oil futures post gains as geopolitical risk turns from the Middle East to Eastern Europe after President Biden approved Ukraine's use of U.S.-supplied long-distance missiles against Russia, raising concerns of a possible escalation in the conflict. The Ukraine-Russia risk premium and a weakening of the dollar were the main contributors to the gains, Ritterbusch says in a note. The price spike "appeared mismatched against fresh headlines but with the market in oversold territory, it didn't take much to boost values some $2.60 from the early lows," the firm adds. WTI settles up 3.2% at $69.16 a barrel, and Brent rises 3.2% to $73.30a barrel. (anthony.harrup@wsj.com)

1601 GMT - Crude futures press higher as the market considers risks of escalation in the Ukraine-Russia conflict after Biden approved Ukraine's use of U.S.-supplied long-range missiles that could strike deeper into Russia. "Oil traders are taking this seriously and watching developments," Phil Flynn of the Price Futures Group says in a note. On the downside, Chinese demand concerns "continue to overshadow global tight supply and optimistic predictions for the upcoming Thanksgiving travel expectations," he adds. WTI is up 2.7% at $68.84 a barrel, and Brent is 2.7% higher at $72.97 a barrel. (anthony.harrup@wsj.com)

1255 GMT - Oil prices are cautiously higher as Biden's decision to allow Ukraine to use long-range missiles against Russia raises perceived geopolitical risk. "While geopolitical tensions have injected some volatility into the market, the overall impact on oil supplies has been limited thus far," Joseph Dahrieh of Tickmill says in a note. A sustained bullish trend is unlikely as demand concerns, "particularly in China, the world's second-largest oil consumer," outweigh geopolitical developments, he adds. WTI is up 0.5% at $67.35 a barrel, and Brent is 0.6% higher at $71.49 a barrel. (anthony.harrup@wsj.com)

1016 GMT - Enel's 2025-27 target for capital expenditure of 43 billion euros is larger than expected, Barclays analysts write. The bank had expected cautious capex expenditure but instead the utility company will increase it by 20% compared to its 2024-26 plan, the analysts say. Its capital allocation includes 26 billion euros for networks. Investment will be focused mainly in Italy and Spain as the company doubles down on regulated assets, the analysts add. Enel also announced a new 1.5 billion euro cost-cutting plan, a 50% increase on the previous plan, they say. The company remains one of the cheapest European integrated utilities and trades at a discount compared to its peers. Shares trade down 0.9% at 6.73 euros. (adam.whittaker@wsj.com)

1011 GMT - John Wood Group's launch of a review of its projects business has created substantial uncertainty around its turnaround progress, Berenberg analysts write in a research note. The Scottish energy-services company's share price has dropped nearly 60% since the company issued the news on Nov. 7. Based on a sum-of-the-parts valuation, the current share price effectively implies no value for the projects business, the analysts say. This isn't unreasonable until more clarity is provided given recurring issues with this business, they say. "We still think that the market requires evidence of actual free cash flow generation in 2025 before credit will be given for any turnaround in the underlying business." Shares are up 6.1% at 53.05 pence. (christian.moess@wsj.com)

(END) Dow Jones Newswires

November 19, 2024 04:20 ET (09:20 GMT)

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