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.
0736 GMT - European energy stocks open lower as oil prices slip. Brent crude and WTI have fallen as investors assess the likelihood that U.S.-Iran diplomatic efforts could reopen the Strait of Hormuz. Brent crude futures are down 1.1% to $105.45 a barrel, while West Texas Intermediate fall 1.9% to $92.85 a barrel. In London, BP falls 2% and Shell drops 0.4%. France's TotalEnergies is 0.8% lower and Spain's Repsol is down 0.6%. Italy's Eni falls 0.2%. Norway's Equinor is down 1.3%. (adam.whittaker@wsj.com)
0730 GMT - CSE Global's new contracts likely have stronger margins than those from its hyperscaler-related orders, CGS International's Tan Jie Hui and Lim Siew Khee sayin a note. The Singapore technology company announced two electrification order wins totaling US$150 million, spanning liquefied-natural-gas and data-center power infrastructure, the analysts say. They estimate the contracts' blended Ebitda margins at around 10%, as they require greater customization than the hyperscaler ones. These order wins could also help CSE Global deepen key relationships in U.S. LNG and hyperscale power infrastructure sectors beyond its current customer Amazon Web Services, they add. CGSI retains its add rating and target price of 1.95 Singapore dollars. Shares rise 0.8% to S$1.27. (megan.cheah@wsj.com)
0658 GMT - Var Energi's deal to buy BlueNord strengthens the equity story well beyond the announced synergies, Citi analyst Tianhong Bi writes. Var Energi announced a deal in July to buy Oslo-listed peer BlueNord in a cash and stock deal valued at around $1.3 billion. Citi says Var shares have undergone a significant rerating since this time last year, but the bank still sees further upside as BlueNord extends cash-flow potential and strengthens confidence in the new 450,000 barrels of oil equivalent per day production ambition. "The combination broadens the resource base, reduces reliance on the higher-decline Norwegian portfolio and creates a 2nd infrastructure-led development engine in Denmark." Citi raises its target price to 57 Norwegian kroner from 48 kroner and keeps buy rating. Shares closed at 53.28 kroner. (dominic.chopping@wsj.com)
0413 GMT - WTI declines as markets reassess the risk of Middle East supply disruptions against the possibility of a U.S.-Iran agreement to reopen the Strait of Hormuz, says Linh Tran at XS.com. The move seems driven by reports that Washington and Tehran are considering a roadmap to end the conflict. Though there is no concrete agreement, the prospect of diplomacy has eased some concerns and limited buying interest in the oil market, says Tran. WTI is also facing pressure from higher U.S. crude inventories and the possibility of diesel export curbs. Brent meanwhile stays supported by concerns over international supply disruptions, widening the spread between the two benchmarks. Tran reckons WTI faces continued consolidation, and will likely underperform Brent. Front-month WTI is last at $93.08 a barrel; Brent is at $105.65 a barrel. (fabiana.negrinochoa@wsj.com)
0043 GMT - Oil prices fall back in Asia as traders weigh the latest headlines around efforts to reopen the Strait of Hormuz, the critical energy shipping lane blocked by fighting in the Middle East. Oil is following the now-familiar pattern of ebb and flow, settling higher overnight after Houthi attacks on Saudi targets raised concerns of escalation. This morning, traders parsed reports that Iran is making a new proposal to reopen the strait and potentially restart talks. However, market participants remain cautious, given the history of failed negotiations between Washington and Tehran, OCBC strategists say. Front-month WTI falls 0.8% to $93.87 a barrel while Brent slips 0.6% to $105.95 a barrel. (fabiana.negrinochoa@wsj.com)
2034 GMT - U.S. natural gas futures rise sharply as TC Energy declared force majeure on a pipeline in West Virginia after detecting a leak. Nymex natural gas rose 9.1% to $3.297/mmBtu, its biggest single-day gain since January and highest close in three months. The outage affects an estimated 1.8 Bcf/d of natural gas from Appalachia. Prices were also supported by a sixth straight below-average storage build that reduced the inventory surplus over the five-year average to 95 Bcf from 118 Bcf.(anthony.harrup@wsj.com)
2029 GMT - Oil futures rose for a second straight session as a spate of Houthi attacks on Saudi targets raised concerns of escalation in the Middle East while the market remains pessimistic about the U.S. and Iran reaching an agreement anytime soon. "You're seeing a lot of turmoil, a lot of uncertainty in the short term," said Phil Flynn of the Price Futures Group. "Concerns about rates going up, concerns about the dollar, a lot of nervousness." Fears about a possible U.S diesel export ban are adding uncertainty, he says. WTI settles up 2.7% at $94.61 a barrel and Brent gains 3.4% to $106.60. (anthony.harrup@wsj.com)
By Anthony Harrup U.S. natural gas futures posted their biggest-single-day gain since January as a pipeline outage Thursday in West Virginia led to supply disruptions.
TC Energy said it detected a natural gas leak at the Saunders Creek Regulator Station in West Virginia around 8:35 a.m. ET and "immediately activated emergency response procedures."
The company said it reduced the pressure of natural gas to isolate the station, and notified customers of delivery impacts. The situation was confined to the Saunders Creek station, TC Energy added.
The outage sent natural gas futures higher, with the October contract on the New York Mercantile Exchange settling up 9.1% at $3.297 per million British thermal units, a three-month high.
Natural gas futures have been gradually rising as a warmer-than-usual September kept up power-sector demand through the tail end of summer, limiting inventory builds. The U.S. Energy Information Administration reported a 53 billion cubic foot injection into storage for last week, a sixth consecutive below-average build that reduced the surplus over the five-year average to 95 Bcf from 118 Bcf the previous week.
Comments