Energy Sector Update for 07/11/2018: MNGA, RIG, CVX, SNDK

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Top Energy Stocks

XOM -1.45%

CVX -2.95%

COP -2.17%

SLB -1.21%

OXY -1.73%

Energy stocks fell for the first time this week, with the NYSE Energy Sector Index Wednesday dropping 1.8% while shares of energy companies in the S&P 500 also were down nearly 1.8% as a group. In commodities trading, West Texas Intermediate crude oil for August delivery was slipping $2.51 to $71.60 per barrel at the New York Mercantile Exchange while the global benchmark Brent crude September contract was declining $2.82, or more than 3.5%, to $76.04 per barrel. August natural gas futures were 4 cents higher at $2.82 per 1 million BTU. Among energy-related ETFs, United States Oil was dropping nearly 3.8% while United States Natural Gas was climbing over 1.5%. The Philadelphia Oil-Services index was down over 1.8% this afternoon.

In industry news:

Crude oil prices softened overnight after US 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 during the seven days ended July 6 to 405.2 million barrels, the Energy Information Administration said Wednesday morning. The decline easily exceeded the 4.8 million-barrel drop expected by industry experts polled by S&P Global Platts and nearly doubled up the 6.795 million barrels decrease reported late Tuesday by the American Petroleum Institute for 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:

+ MagneGas Corp ( MNGA ) climbed over 15% at one point on Wednesday, more recently easing to a nearly 7% gain, after biodiesel company reported $3 million in sales during the three months ended June 30, marking a 213% increase over year-ago levels and topping the single-analyst estimate expecting $1.93 million in Q2 sales. The company credited recent acquisitions for the outsized sales increase, noting that after completing its acquisition of San Diego-based Complete Welding, San Diego was the company's best performing market during the just-concluded quarter. Sales in eastern Texas and in Louisiana also surged, rising 33% over the preceding quarter, supported by MagneGas' purchase of Green Arc Supply in February. Green Arc produced $133,000 in sales during June alone, the company said, with the addition of new clients in Shreveport, La., and Flint, Texas, contributing to the rise.

In other sector news

- Transocean Ltd ( RIG ) has retraced almost all of its early decline, Wednesday afternoon falling over 2%, 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 Aug. 1, 2021. Net proceeds from the offering will be used to partially fund construction and the acquisition of the Deepwater Pontus drill rig.

- Chevron ( CVX ) fell as much as 3% on Wednesday following reports the energy major will soon withdraw operations from the Makassar Strait gas block in the Indonesia Deepwater Development offshore natural gas project to instead focus on more promising areas in the venture. Reuters, in a report citing government officials, said the Indonesian energy ministry terminated Chevron's production sharing contract after the company decided not to extend its operations in the exploration block beyond 2020. Chevron did not respond to a Reuters request for comment.

- 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 at the oil and natural gas producer to become chief executive officer with another energy company.

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: MNGA , RIG , CVX , SN

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