Welcome to the MarketReader Energy Minute.

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

Thursday, August 29

XLE [+0.6%]
The Energy Select Sector SPDR Fund (XLE) has increased by 0.6% since Wednesday, buoyed by significant movements among its holdings. Exxon Mobil (XOM) contributed notably despite facing potential delays in its Golden Pass LNG project until 2029 due to construction setbacks. Chevron (CVX) saw a positive return as Marathon Oil received stockholder approval for its merger with ConocoPhillips, expected to finalize in late Q4 2024. EOG Resources (EOG) experienced a return increase as an executive sold shares, while ONEOK (OKE) strengthened its position in the Permian Basin through a $3.3 billion acquisition. Additionally, Exxon’s warning of an impending oil supply crisis due to insufficient investment in new production has implications for XLE. Geopolitical tensions following Ukraine's strikes on Russian oil depots may further disrupt global energy markets, contributing to XLE's current daily return of 0.32%.

USO [+2.3%]
The United States Oil Fund LP (USO) has experienced a price increase of 2.3% during market hours today. This rise coincides with Libya's suspension of oil-loading operations at five export terminals due to political tensions, potentially reducing output by up to one million barrels per day for several weeks. Additionally, West Texas Intermediate (WTI) crude prices have reached premarket highs, supported by a report showing a decline in U.S. oil inventories by 0.8 million barrels last week. Iraq's planned reduction in oil production to between 3.85 and 3.9 million barrels per day in September as part of OPEC commitments further underscores the tightening supply dynamics. ExxonMobil has also warned of an impending oil supply crisis linked to inadequate investment in new production, despite forecasts of declining demand from electric vehicles.

BOIL [-1.7%]
ProShares Ultra Bloomberg Natural Gas (BOIL) has experienced a decline of 4.6% since Wednesday. Current natural gas prices are under pressure from geopolitical tensions, particularly due to Ukraine's recent strikes on Russian oil depots, which may disrupt global energy supplies. Concurrently, the U.S. GDP growth for Q2 2024 has been revised upward to 3%, suggesting stronger economic performance that could influence demand in the natural gas market as consumer spending increases. Amid these developments, the XNG/USD has shown a daily return increase of 1.62%, reflecting broader market fluctuations and ongoing concerns regarding supply stability due to political unrest in key energy-producing regions.

XOM | $117.45 | +0.8% | +4.3B

RYDAF | $36.00 | +1.6% | +3.7B

CVX | $147.14 | +0.8% | +2.1B

PARXF | -31.1% | -280.2M
Parex Resources Inc has experienced a significant price drop today, moving down sharply since Wednesday. The company has revised its operational outlook, citing underperformance at its Arauca asset, which has led to a notable reduction in production guidance for 2024. Average production forecasts have been adjusted downward, and capital expenditure guidance has also decreased. Despite these challenges, Parex remains committed to returning value to shareholders through dividends and share buybacks. Additionally, the company is undergoing a leadership transition with the appointment of Cameron Grainger as interim CFO following the departure of Sanjay Bishnoi. Parex is currently trading with an unusually high share of market volume and is underperforming relative to its sector peers.

NOA | +5.4% | +28.7M
North American Construction Group Ltd's subsidiary, MacKellar Group, has secured a five-year contract valued at approximately 375 million with a leading metallurgical coal producer in Queensland, Australia. This contract will transition the existing dry rental fleet to a fully maintained fleet, with a ramp-up expected by mid-2025. The agreement, which expires on September 30, 2029, will add to the company's backlog, now exceeding 3 billion. To meet the contract's requirements, an on-site maintenance facility and 20 additional units will be established, with total growth capital estimated between 50 million and 55 million, primarily to be invested in the fourth quarter of 2024. The stock has moved up significantly since Wednesday.

CLCO | +5.3% | +31.1M
Cool Company Ltd reported Q2 sales of $83.372 million, slightly surpassing the analyst consensus estimate of $83.333 million, but reflecting a decline from the $90.316 million recorded in the same period last year. CEO Richard Tyrrell highlighted that the company utilized quieter months for drydocks and to secure additional forward charter cover. The time charter equivalent (TCE) performance improved to $78,400 per day, bolstered by contributions from two vessels that recently commenced enhanced time charters. Following the announcement of Q2 results at 8:00 am NY, which included a maintained dividend of $0.41 and an AEBITDA of $55.7 million, shares of Cool Company Ltd experienced a notable increase in trading activity, rebounding by 8% in pre-market trading, as recent sell-offs were deemed unwarranted with no earnings leaks reported.

UGP | -3.3% | -147.5M
Ultrapar Participacoes SA (UGP) has experienced a decline of approximately 3.3% since Wednesday. This movement coincides with the significant drop of Azul SA (AZUL), which has fallen sharply amid its exploration of an equity offering to avert bankruptcy due to substantial debt obligations. Azul's struggles, including the potential for a Chapter 11 filing and merger considerations, have contributed to its steep decline. Given the historical correlation between Ultrapar and Azul, this turmoil in the airline sector may have implications for Ultrapar's performance. Additionally, Ultrapar is currently underperforming relative to its sector peers.

KOS | +3.3% | +78.0M
Kosmos Energy Ltd (KOS) has increased by 3.4% since the previous close, coinciding with a 2.26% rise in the United States Oil Fund LP (USO) and a 2.49% increase in WTI crude prices. The upward momentum in oil prices is attributed to Libya's suspension of oil-loading operations at five export terminals due to ongoing political tensions, which may significantly reduce output. Additionally, a report indicating a decline in U.S. oil inventories supports this price increase. Notably, Kosmos Energy is currently outperforming its sector peers.

XOM | +0.8% | +4.3B
Exxon Mobil Corp is currently experiencing an increase in price, aligning with a broader upward movement in the market. The company's Golden Pass LNG project is facing potential delays, as the developer has requested an extension until 2029 to operationalize the liquefied natural gas terminal. This request is due to construction delays linked to contractor bankruptcy and scheduling uncertainties. The current deadline for project completion remains set for November 2026, according to a filing with the Federal Energy Regulatory Commission (FERC). Additionally, ExxonMobil forecasts that crude oil demand will remain stable through 2050, a prediction that could influence market dynamics.

Open MarketReader to see more.

Thank you for spending a minute with us. 

If you have 2 more minutes, watch this demo of the MarketReader Platform: