Energy Sector Update for 07/11/2018: GE,MNGA,RIG,SN

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Top Energy Stocks

XOM -1.29%

CVX -3.21%

COP -2.25%

SLB -1.58%

OXY -2.19%

Energy stocks fell for the first time this week, with the NYSE Energy Sector Index Wednesday dropping over 2.5% while shares of energy companies in the S&P 500 also were down nearly 2.2% as a group. In commodities trading, West Texas Intermediate crude oil for August delivery settled $3.41 lower to $70.70 per barrel at the New York Mercantile Exchange while the global benchmark Brent crude September contract declined $4.70, or just under 6%, to $74.16 per barrel. August natural gas futures rose $0.04 to $2.83 per 1 million BTU. Among energy-related ETFs, United States Oil dropped nearly 5% while United States Natural Gas climbed over 1.5%. The Philadelphia Oil-Services index was down over 2.7% this afternoon.

In industry news:

Crude oil prices declined Wednesday after Secretary of State Mike Pompeo said the White House would consider extending sanctions relief to some oil buyers of Iranian crude beyond the previously announced November deadline. Pompeo's remarks were made as the US was sending officials to the Middle East to shore up support for sanctions and stood in sharp contrast to State Department comments two weeks ago warning allies to eliminate their imports of Iranian crude by Nov. 4 or face sanctions.

Crude oil inventories plunged by 12.6 million barrels to 405.2 million barrels during the seven days ended July 6, the Energy Information Administration said Wednesday. The decline easily exceeded the 4.8 million-barrel drop expected by industry experts polled by S&P Global Platts and nearly doubled the 6.795 million barrels decrease reported late Tuesday by the American Petroleum Institute over the same seven-day period. Gasoline and distillates supplies continued to move in opposite directions last week, with the federal agency reporting a decline of around 700,000 barrel in gasoline inventories while distillate stocks recorded an increase of 4.1 million barrels.

Among energy stocks moving on news:

- General Electric ( GE ) was down almost 1% late Wednesday following reports the digital industrial company is working on a pair of major energy deals in Bangladesh. The first project is a joint venture between GE, Mitsubishi and local privately owned Summit Corp to develop a $3 billion thermal plant as well as related oil and liquefied natural gas terminals. The second project is a $2.8 billion partnership between GE and state-run Bangladesh Power Development Board to build an LNG-to-gas combined cycle power plant.

In other sector news

+ MagneGas ( MNGA ) climbed over 15% at one point on Wednesday after the biodiesel company said it generated $3 million in sales during its Q2 ended June 30, rising 213% over the same quarter last year and topping the single-analyst estimate expecting $1.93 million in Q2 sales. The company said several recent acquisitions contributed to sales increase, including its purchase of San Diego-based Complete Welding in January as well as the February addition of Green Arc Supply in February.

- Transocean ( RIG ) has retraced almost all of its early decline Wednesday afternoon falling after the oilfield-service company, through a subsidiary, late Tuesday priced a $600 million private placement of 6.125% senior secured notes due 2025. The notes will be callable after August 1, 2021. Net proceeds from the offering will be used to partially fund construction and the acquisition of the Deepwater Pontus drillrig.

- Sanchez Energy ( SN ) still was down over 3% Wednesday afternoon, more than halving a nearly 7% retreat earlier in the session that followed the oil and natural gas producer late Tuesday saying Christopher Heinson has resigned as chief operating officer to become chief executive officer with another energy company.

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This article appears in: Investing , Energy
Referenced Symbols: GE , MNGA , RIG , SN

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