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Energy Sector Update for 06/20/2018: HES, EGY, ZN, EAE


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Energy stocks have turned higher again this afternoon, firming following some mid-day weakness, with the NYSE Energy Sector Index Wednesday rising more than 0.4.% while shares of energy companies in the S&P 500 were up just over 0.6% as a group. West Texas Intermediate crude oil for July delivery settled $1.15 higher at $66.22 per barrel as the contract expired this afternoon in New York while the global benchmark Brent crude August contract fell 62 cents to $74.46 per barrel. July natural gas futures rose 6 cents to $2.96 per 1 million BTU. Among energy-related ETFs, United States Oil was posting a more than 1.0% increase in late trade while United States Natural Gas also was gaining almost 1.6%. The Philadelphia oil-service sector index was almost 0.7% higher, reversing a prior decline.

In industry news:

Crude oil prices turned mixed this afternoon after government data showed a larger-than-expected decline in U.S. crude oil supplies, with the U.S. Energy Information Administration Wednesday reporting a 5.9 million barrel decline during the seven days ended June 15. That compares with the American Petroleum Institute late Tuesday reporting a decline of 2.7 million barrels last week while industry experts polled by S&P Global Platts had been expecting a drop of 3 million barrels. The agency also said gasoline inventories rose 3.28 million barrels last week compared with forecasts expecting a 1 million barrel drop while distillate stockpiles climbed 2.715 million barrels versus expectations for a 700,000-barrel drop.

Among energy stocks moving on news:

+ Hess Corp ( HES ) was more than 2% higher late in Wednesday trading after the energy company announced its eighth oil discovery offshore Guyana, saying the Longtail-1 exploration well found 256 feet of high-quality, oil-bearing sandstone reservoir and creating the potential for additional resource development in the southeast area of the Stabroek Block. Following completion of the Longtail-1 well, the company will move the Stena Carron drillship to the Hammerhead-1 well located about 9 miles southwest of its Liza discovery. It also plans to soon add a third drillship operating in parallel to the Stena Carron to explore additional high-value prospects. Hess holds a 30% interest in the Stabroek block.

In other sector news

+ Zion Oil & Gas ( ZN ) advanced Wednesday, rising 3.5% soon after the opening bell, after saying it expects to begin perforation, stimulation and flow back operations at its Megiddo-Jezreel #1 well in Israel as soon as Thursday, June 21.

+ Vaalco Energy ( EGY ) rose Wednesday, climbing about 3% in recent trading, after the oil and natural gas producer said its Avouma 2H well was back online after replacing a submersible electric pump system. The well is producing at rates in excess of pre-shutdown levels and is expected to stabilize around 2,000 barrels of oil per day, Vaalco said.

- Eni SpA ( E ) was fractionally lower in Wednesday trading after the Italian energy major said it is selling 100% of its Eni Croatia unit to INA-Industrija nafte, a Croatian multinational oil company. Financial terms of the transaction were not disclosed. The sale ends Eni's upstream participation in Croatia, where the company has partnered with the INA Group since 1996. The companies also plan to secure natural gas supplies for the Italian market through a commercial agreement between INA and Eni.

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: HES , ZN , EGY , E , EAE



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