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Energy Sector Update for 04/24/2018: ENB,ENB.TO,MDR,WFT,HUBB


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Energy stocks turned lower today, falling back from their prior gains. At last look, the NYSE Energy Sector Index today fell over 0.8% while shares of energy companies in the S&P 500 were down 1.1% as a group. West Texas Intermediate crude oil for June delivery settled 94 cents lower at $67.70 per barrel in New York while the global benchmark Brent crude June contract fell 79 cents to $73.92 per barrel. May natural gas futures rose 4 cents to $2.78 per 1 million BTU. Among energy-related ETFs, United States Oil was down more than 1.7% while United States Natural Gas was increasing over 1.4%. The Philadelphia oil-service sector index was down less than 0.4% this afternoon.

In industry news:

Oil prices finished more than 1% lower on Tuesday, reversing an earlier advance to new 40-month highs amid concerns U.S. President Donald Trump will soon walk away from the international accord limiting Iran's nuclear program. The White House has until May 12 to decide whether the United States will abandon the pact and impose sanctions on the country. Continuing export restrictions from OPEC and Russia, removing 1.8 million barrel per day from the market, also were supporting prices.

Among energy stocks moving on news:

- Enbridge (ENB,ENB.TO) slumped to a seven-year low on Tuesday, sliding over 6% to its lowest price since January 2011 at $29.27 a share, after an administrative law judge in Minnesota late Monday recommended state regulators approve the Canadian pipeline company's C$8.2 billion L3R project "but only if" the Minnesota Public Utilities Commission selects the existing right-of-way along "Route Alternative 07" rather than Enbridge's preferred route for the Alberta-to-Wisconsin connection. Analysts at RBC Capital Markets, while reiterating their Outperform recommendation for Enbridge stock, cautioned against looking at Monday's decision as positive, explaining the alternative route would require a shutdown of the existing Line 3 pipeline for up to 12 months plus the added $1.28 billion pricetag of removing the old pipeline. Analysts at Credit Suisse had a somewhat more positive view, in addition to reiterating their Outperform rating and $64 price target for Enbridge, writing in a new research note that "few things in pipelining have been ideal lately." They also said the decision was better than an outright rejection despite its challenges.

In other sector news

+ Weatherford International ( WFT ) jumped over 15% higher on Tuesday after reporting a smaller-than-expected Q1 net loss. Excluding one-time items, the oilfield-services company recorded a non-GAAP net loss of $0.19 per share during the three months ended March 31, topping the Capital IQ consensus expecting a $0.23 per share net loss. Revenue grew to $1.42 billion from $1.39 billion during the year-ago quarter although that lagged the $1.45 billion analyst mean.

+ McDermott International ( MDR ) extending its recent advance to a second day on Tuesday after reported Q1 net income more than doubling its year-ago profit and topping Wall Street estimates. Excluding one-time items, it earned $0.17 per share, surpassing the Capital IQ consensus by $0.01 per share. Revenue also rose to $607.8 million from $519.4 million last year and narrowly beat the $607.5 million Street view. The company also issued FY18 earnings and revenue straddling analyst expectations.

+ Hubbell Inc. ( HUBB ) was hanging on to a small gain after the oil-tanker company Tuesday reported adjusted Q1 net income and sales exceeding analyst projections and raised it FY18 guidance. Excluding one-time items, Hubbell earned $1.39 per share, topping the Capital IQ consensus by $0.03 per share. Net sales jumped to $991.2 million from $852.3 million last year, also beating the $976.0-million consensus call.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing , Energy
Referenced Symbols: WFT , MDR , HUBB , ENB



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