Welcome to the MarketReader Energy Minute.

Below are AI-generated insights on moves in the energy sector, powered by MarketReader technology.

Wednesday, July 24

XLE [+0.3%]
Energy Select Sector SPDR Fund (XLE) experienced a positive price movement of +0.3% since Tuesday's close, driven by notable gains in top holdings like XOM, COP, and MPC. Exxon Mobil Corp's stock rose due to news on its Joliet refinery operations, while Marathon Petroleum Corp benefited from potential political support. Additionally, CITI forecasts suggest the rig count bottom for XLE components may have been reached in the second half. Geopolitical tensions affecting rearmament needs and U.S. crude price declines are influencing XLE's performance, with caution advised amid concerns of global economic deterioration. Furthermore, US crude oil inventories fell more than expected, impacting XLE stock movement, alongside unexpected drops in new home sales affecting the fund's volatility.

USO [+0.9%]
The United States Oil Fund LP experienced a +0.3% price change, likely influenced by significant drawdowns in U.S. crude oil inventories reported by the Energy Information Administration (EIA) and the American Petroleum Institute (API). The EIA documented a 3.7 million barrel decrease, surpassing expectations, while the API reported a 3.9 million barrel draw. These inventory declines, indicating increased demand or decreased supply, are believed to have positively impacted the USO fund's price movement. Additionally, various factors affecting the oil market include reports of increased Iranian oil exports despite U.S. sanctions, potential supply risks from wildfires in Canada, and ongoing geopolitical tensions globally impacting demand outlooks for crude oil.

UGA [+1.5%]
United States Gasoline Fund LP (UGA) experienced a 0.8% price increase following the US EIA Crude Oil Stocks decline of 3.741M barrels, surpassing the expected drop of 2.05M barrels. This marked the fourth consecutive week of decline, impacting UGA's movement in line with its historical volatility patterns. Gasoline stocks decreased significantly by -5.572M compared to an expected -0.9M, while Distillate Stocks fell by -2.753M against an anticipated increase, further influencing UGA's price movement based on typical volatility trends surrounding such events.

BOIL [-4.0%]
Movements in ProShares Ultra Bloomberg Natural Gas prices are potentially influenced by the sale of a stake in TC Energy's natural gas pipeline network to indigenous groups, the acquisition of cryogenic LNG pump technology by Flowserve Corporation, and the impact of Arctic resource extraction on global energy markets. Additionally, developments related to Novatek's production levels and sales volumes may also be contributing factors affecting market sentiment towards Natural Gas.

XOM | $114.86 | +1.3% | +6.7B

RYDAF | $36.62 | +2.7% | +6.2B

WMB | $42.67 | -3.2% | -1.7B

WFRD | -8.7% | -779.8M
Weatherford International PLC's stock price dropped significantly following worse-than-expected Q2 financial results, with lower-than-anticipated adjusted earnings and revenue slightly below expectations. The company introduced a $500 million share repurchase program and a $1 per share annual dividend to enhance shareholder value. Despite revenue and net income increases, missed earnings estimates led to a negative market reaction. The CEO cited revenue challenges from weather events and social unrest, expressing confidence in mid-single digits sequential revenue growth for the second half of the year, driven by strong international and offshore activity levels. The company reported Q2 earnings with EPS at $1.66 versus an expected $1.74 and revenues at $1.4B versus an expected $1.4B.

WMB | -3.2% | -1.7B
Williams Companies Inc (WMB) has decreased by -2.6% since Tuesday's close, potentially influenced by the Dow Jones Index moving down by -0.92%. New Home Sales for June 2024 in the United States came in at 617.0M, below expectations and the lowest in seven months, impacting different regions disparately with sales dropping in the Northeast and Midwest but slightly increasing in the South and West. Despite an increase in listings, median prices remained stable compared to a year earlier, resulting in about 9.3 months of supply at the current sales rate. Williams Companies Inc is currently underperforming its sector peers.

MTDR | +2.7% | +207.5M
Matador Resources Co's stock price increased by 2.6% following TD Cowen's Buy rating maintenance and raised price target to $87, along with strong Q2 earnings surpassing estimates with EPS of $2.05 and sales of $847.14 million. The company also lifted its full-year 2024 production guidance, excluding an upcoming acquisition, contributing to the positive market response. This coincided with Nabors Industries Ltd rising by 5.06% after its Q2 results, showcasing a correlated movement with Matador Resources Co. Additionally, US New Home Sales MoM unexpectedly dropped by 0.6% in June, impacting MTDR and the Energy sector, alongside EIA Gasoline and Crude Oil Stocks changes influencing potential price shifts for MTDR within their respective sectors.

KMI | -1.4% | -645.8M
Kinder Morgan Inc (KMI) experienced a -0.7% price movement, aligning with the broader market trend as the Dow Jones Index dropped -0.73%. KMI shares are trading significantly lower alongside its sector today, with an unusually high market volume share. Additionally, in specific macroeconomic news, the US S&P Global Services PMI Flash exceeded expectations in July 2024, showing a positive trend in new business inflows but with concerns over slower payroll growth and decreased future output optimism due to election uncertainty. Conversely, the US Manufacturing PMI Flash unexpectedly declined, indicating deteriorating conditions within the goods-producing sector despite slightly improved business sentiment post-election anticipation.

MPC | +1.5% | +894.3M
Marathon Petroleum Corp's stock price increased by 1.9% since the previous close, potentially buoyed by news of a political lifeline offering support to the undervalued company. This lifeline, though controversial, presents an opportunity for positive movement as the company navigates the downstream hydrocarbon market. Additionally, the United States EIA Gasoline Stocks Change exceeded expectations, causing increased volatility for MPC and Energy sector stocks. Moreover, the United States S&P Global Manufacturing PMI Flash reported a lower-than-expected value, indicating deteriorating business conditions within the goods-producing sector, leading to notable market movements historically tied to manufacturing PMI releases. Marathon Petroleum Corp is currently outperforming its sector peers and may be leading in sector strength.

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