Welcome to the MarketReader Energy Minute.

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

Thursday, July 25

XLE [+1.0%]
The Energy Select Sector SPDR Fund rose by 0.6% following positive movements in its holdings, notably XOM, CVX, VLO, EOG, and SLB. Valero Energy Corp reported strong financial results and strategic initiatives, while Schlumberger NV opted for delisting from Euronext Paris. The fund's increase coincided with oil price declines in Asian trade due to concerns over Chinese demand and potential market surplus in 2025. Market sentiment towards the energy sector was influenced by upcoming U.S. GDP and inflation data, alongside uncertainties surrounding the U.S. presidential race. Additionally, calculated pivot points suggest a potential bullish sentiment if the price surpasses $90.75 or a bearish outlook if it falls below $89.31 based on the DeMark method.

USO [+0.3%]
The United States Oil Fund LP experienced a -1.0% change influenced by West Texas Intermediate crude falling 1.5% to just over $76 per barrel amidst concerns over Chinese demand, upcoming U.S. economic data, and worries of a market surplus in 2025. The fund's performance was also impacted by weak European markets, disappointing earnings from major U.S. companies, a surprise rate cut in China, and negative movements in commodities like gold, silver, and copper. Additionally, the recent drop in US Initial Jobless Claims may further affect oil prices given historical volatility trends around this release.

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 [-7.0%]
ProShares Ultra Bloomberg Natural Gas (BOIL) experienced a -6.5% price movement since Wednesday's close, coinciding with record low wholesale spot prices in the first half of 2024 despite increased demand from extreme heat. Dry natural gas production rise and elevated storage levels have led to an inventory surplus, impacting pricing despite expected consumption growth. The United States EIA Natural Gas Stocks Change reported 22Bcf actual vs. 15Bcf expected, causing higher-than-anticipated gas stock rise and influencing BOIL's volatility beyond its usual levels. Fluctuations in U.S. natural gas stockpiles continue to sway market sentiment and price movements for this asset class.

XOM | $116.43 | +1.3% | +6.6B

CVX | $156.68 | +1.1% | +3.1B

RYDAF | $35.22 | +0.9% | +2.1B

VLO | +2.9% | +1.4B
Valero Energy Corp's stock price rose by +3.4% post Wolfe Research's price target adjustment to $178, reflecting a positive outlook. Despite lower YoY earnings and sales, Q2 2024 GAAP EPS beat estimates at $2.71, with revenues slightly missing expectations at $30.94 billion. The company's strategic focus on the Sustainable Aviation Fuel project aims to bolster its position in sustainable aviation fuel production. Valero's CEO underlined operational excellence, growth projects, and shareholder returns as key success factors. Amid scrutiny for missing EPS estimates at $2.71 compared to the expected $4.10, and revenue below projections at $34.49 billion versus $34.82 billion for Q2 2021, investors are closely monitoring operational challenges and capital allocation strategies impacting the company's performance.

FTI | +6.6% | +827.0M
TechnipFMC PLC's stock price surged 6.4% following the release of their 2024 full-year financial guidance, showing an increase in subsea revenue, adjusted EBITDA margin, and free cash flow. The Q2 2024 adjusted EPS exceeded estimates, with sales surpassing expectations. The company also raised their revenue guidance for FY2024. This positive financial performance coincided with the stock's notable price movement, which also correlated with Oceaneering International Inc's 11.03% rise driven by strong Q2 earnings despite missing revenue estimates. TechnipFMC PLC is outperforming its sector peers and potentially leading the sector's strength.

NE | +2.5% | +168.4M
Noble Corporation PLC (NE) has risen by 2.2% following Helmerich & Payne Inc.'s (HP) acquisition of KCA Deutag for $1.9725 billion, aiming to bolster its onshore drilling position. NE is set to disclose Q2 FY2024 earnings post-market on Jul 31, 2024, with an anticipated EPS of $0.6 (previously $0.38) and revenue of $631.4M (previously $638.5M). This surge coincides with a broader sector uptrend.

APA | +2.7% | +316.5M
APA Corp (US) is expected to report Q2 FY2024 earnings today with an EPS estimate of $1.08 and revenue estimate of $2.4B, both higher than previous figures. The stock moved 2.8% in correlation with Helmerich and Payne Inc (HP), which surged 11.89% after acquiring KCA Deutag for $1.9725 billion in cash to bolster its global onshore drilling position. APA Corp (US) is currently outperforming its sector peers.

BKR | +1.8% | +629.8M
Baker Hughes Co (BKR) has moved +0.9% since Wednesday's close, coinciding with United States Durable Goods Orders MoM reporting -6.6% versus the expected 0.3%, significantly lower than anticipated. This unexpected decline, driven by a sharp drop in transportation equipment orders, has impacted BKR's stock price movement due to its historical correlation with such data releases and the Energy sector, despite some resilience when excluding certain sectors from the analysis after four consecutive monthly increases prior to June 2024.

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