Welcome to the MarketReader Energy Minute.

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

Tuesday, August 13

XLE [-1.3%]
The Energy Select Sector SPDR Fund (XLE) has declined by 0.7%, coinciding with a drop in oil prices following OPEC's downward revision of its 2024 demand forecast from 2.25 million barrels per day to 2.11 million barrels per day, largely due to concerns regarding China's post-COVID economic recovery. Significant contributors to the ETF's performance included ExxonMobil, ConocoPhillips, Occidental Petroleum, Schlumberger, and Marathon Petroleum, all of which posted negative returns. Occidental Petroleum has also initiated a secondary public offering of approximately 29.56 million shares, priced at $58.30, alongside a separate offering of 19 million common units in Western Midstream Partners, which has seen its shares decline by 3.1% in after-hours trading. Additionally, WTI crude is trading around $79 per barrel amid geopolitical tensions and volatility in crude oil prices.

USO [-0.5%]
Oil prices have fallen, influenced by a lower-than-expected U.S. Producer Price Index, which has heightened expectations for potential interest rate cuts by the Federal Reserve. The International Energy Agency's forecast of weak demand growth, particularly from China, has further contributed to this decline. Additionally, OPEC has revised its 2024 demand growth outlook downward, raising concerns over global oil demand. Amid escalating geopolitical tensions in the Middle East, particularly regarding potential Iranian attacks on Israel, Brent crude has surpassed $80 per barrel, reflecting fears of supply disruptions. This volatility is compounded by OPEC's recent downgrade of its global oil demand growth forecast, underscoring uncertainties surrounding future consumption patterns.

UGA [-1.0%]
United States Gasoline Fund LP (UGA) has experienced a price decline of 1.2% since Monday. Concurrently, Brent crude oil prices have also decreased, reflecting broader market dynamics that typically influence gasoline fund valuations. The correlation between UGA and oil prices suggests that this drop in crude may be relevant to the current movement in UGA.

XOM | $117.86 | -0.9% | -5.0B

RYDAF | $35.05 | -1.6% | -3.5B

CVX | $143.34 | -1.2% | -3.1B

OXY | -2.9% | -1.5B
Occidental Petroleum Corp has launched a secondary public offering of approximately 29.56 million shares, priced at $58.30, with a deal range of $58.30 to $58.50. The offering is being managed by JPMorgan, Morgan Stanley, and RBC Capital. Concurrently, affiliates of Occidental have initiated a separate secondary public offering of 19 million common units in Western Midstream Partners, projected to yield gross proceeds of $685.9 million. Following this announcement, shares of Western Midstream experienced a decline in after-hours trading. Additionally, Occidental's affiliates are involved in underwritten public offerings for CrownRock Holdings L.P., with Barclays and J.P. Morgan among the underwriters. These offerings are contingent on market conditions, and no shares are being offered directly by Occidental in either case.

FANG | -2.2% | -786.3M
UBS analyst Josh Silverstein has lowered the price target for Diamondback Energy Inc to 245.00 from a previous 257.00, while maintaining a Buy rating. This change reflects updated expectations regarding the company's performance amid current market conditions. Concurrently, Brent crude oil prices have declined, contributing to a 2.2% drop in Diamondback's stock. Additionally, the Producer Price Index (PPI) for the United States recorded a month-over-month increase of only 0.1% in July 2024, falling short of the anticipated 0.2%. This lower-than-expected PPI, along with a year-over-year decline in producer inflation to 2.2%, has heightened market volatility, particularly given that Diamondback typically reacts significantly to inflation data.

EOG | -1.8% | -1.3B
EOG Resources Inc has experienced a decline of 1.7%, reflecting a broader downturn in the energy sector, notably with Occidental Petroleum Corp dropping significantly. Brent crude oil prices have also decreased, contributing to the negative sentiment in energy stocks. In company-specific news, Executive Vice President and Chief Operating Officer Jeffrey R. Leitzell sold 4,000 shares at a price of $126.48 each, totaling approximately $505,920, while retaining ownership of 35,057 shares. BMO Capital has raised its price target for EOG Resources to 140 from 137, maintaining an outperform rating. Similarly, Capital One adjusted its price target to 146 from 145, with an average rating of outperform and a price target range of 124 to 169 according to analysts polled by Capital IQ.

CTRA | -2.0% | -350.2M
Coterra Energy Inc (CTRA) has seen a decline of 1.7%, consistent with a broader downturn in the energy sector, particularly reflected in Occidental Petroleum Corp (OXY), which is down significantly. Brent crude oil prices have also decreased, contributing to the negative sentiment in the market. Additionally, BMO Capital has revised its price target for Coterra Energy to 32 from 33 while maintaining a Market Perform rating. Analysts surveyed by Capital IQ show an average outperform rating for Coterra, with price targets ranging from 26 to 41.

COP | -1.6% | -2.1B
Conocophillips is currently experiencing a decline, moving lower alongside its sector. This drop coincides with a significant decline in Occidental Petroleum Corp, which has fallen notably, and a decrease in WTI oil prices. Additionally, recent U.S. Producer Price Index data for July 2024 showed a modest month-over-month increase that fell short of expectations, which typically impacts the energy sector. Conocophillips has demonstrated sensitivity to such inflation reports, historically reacting more sharply than the PPI itself. Following the PPI announcement, Conocophillips exhibited a peak reaction, reflecting broader market concerns regarding slowing inflation and its potential effects on energy demand.

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