Energy Sector Update for 01/05/2023: NRGV, PCG, RIG, PDS, PD.TO, EQNR

Energy stocks gave back a portion of their Thursday advance this afternoon, with the NYSE Energy Sector Index rising 1.1% in late trade and the Energy Select Sector SPDR Fund (XLE) gaining 1.7%. The Philadelphia Oil Service Sector index was posting a 1.6% advance but the Dow Jones US Utilities Index was slipping 2.4%.

West Texas Intermediate crude oil settled 1.3% higher at $73.79 per barrel despite the Energy Information Administration reporting a surprise increase of 1.7 million barrels in commercial inventories during the seven days ended Dec. 30 compared with market expectations for a drop of 1.2 million barrels last week.

North Sea Brent crude also was advancing 1.2% to $78.80 per barrel while Henry Hub natural gas futures declined nearly 11% to $3.72 per 1 million BTU.

In company news, Energy Vault Holdings (NRGV) dropped 6.4%. The battery-storage company said it was partnering with a PG&E (PCG) subsidiary to build and operate a utility-scale battery and green hydrogen long-duration energy storage system. The companies are expecting to begin construction before the end of the year, with commercial operations slated to start by mid-2024. PG&E shares also were almost 1% lower in late trade.

To the upside, Equinor (EQNR) added 0.9% higher after the Norwegian energy major said it has signed a memorandum of understanding with German energy company RWE to replace coal-fired power plants with hydrogen-ready, gas-fired power plants in Germany. Financial terms were not disclosed.

Precision Drilling (PDS) was ending 2.5% higher, recovering from a 1% morning decline, after the energy-services company said it surpassed its CA$75 million debt-reduction goal during 2022, eliminating CA$106 million in liabilities last year.

Transocean (RIG) gained 7.4% after late Wednesday saying it received new contract awards and extensions for five of its drill rigs, adding a combined $488 million to its backlog.

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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