What to Watch

Banks Raise Oil Price Forecasts For 2018

 Banks raised their forecasts for oil prices for the seventh consecutive month in April by more than $1 compared with the month prior, reports The Wall Street Journal’s Christopher Alessi.

Brent is now expected to average over $64 a barrel this year, while West Texas Intermediate should average just above $60 a barrel, according to a poll of 14 investment banks surveyed by The Wall Street Journal.

The banks made the upward revision on the back of heightened geopolitical risk to supply and strong compliance with the production cuts led by the Organization of the Petroleum Exporting Countries.

Energy News

Oil Prices Tread Water

Oil prices were mixed Wednesday morning after slipping the day prior on the back of a stronger U.S. dollar.

Brent crude—the global benchmark—was down 0.33%, at $72.89 a barrel on London’s Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.21%, at $67.38 a barrel.

Tesla Weighed Down by Solar Panels

Electric-car maker Tesla Inc.’s solar-panel business, SolarCity, is facing slowing installation at the same time it could need to meet guarantees on investment returns, report The Wall Street Journal’s Susan Pulliam, Tim Higgins and Ianthe Jeanne Dugan.

“The elevated uncertainty suggests volatile but range-bound oil prices going forward.”

Norbert Ruecker, head of macro and commodity research at Julius Baer

Big Oil Shareholders Want More Than Profit

Investors in the world’s biggest oil companies are raising their standards after three years of suffering through low oil prices, calling for immediate returns, spending discipline and more production, reports Bloomberg.

Big Number

700,000 Barrels

U.S. crude-oil stockpiles are expected to have increased by 700,000 barrels in the week ended April 27 in data due Wednesday from the U.S. Energy Information Administration, according to a survey of analysts and traders by The Wall Street Journal.

FutureCurve

Today: The U.S. Energy Information Administration releases weekly U.S. petroleum inventory data.

Friday: Baker Hughes releases weekly data on the number of rigs drilling for oil in the U.S.

Reporter’s Notebook

Wall Street Journal reporter Sarah Kent on BP earnings.  BP flagged the prospect of a dividend hike in the second quarter as it reported its strongest quarterly results in more than three years. The company has already started a share-buyback program after cost-cutting efforts and a recovering oil price helped strengthen its cash position in recent quarters. Going into the second half of the year, if debt levels come down, Chief Financial Officer Brian Gilvary says the company’s board is likely to look again at the question of raising the dividend.

Wall Street Journal reporter Bradley Olson on quarterly profits at U.S. oil companies. Although it is still early in earnings season for U.S. exploration and production companies, some have recently reported quarterly profit, a rare occurrence over the last several years. Noble Energy said net income was $554 million in the first three months of the year, and Whiting Petroleum said profits reached $15 million in that time. Hess and QEP Resources saw quarterly losses, however, so the results have not been uniformly positive across the sector, even as U.S. oil prices hover near $70 a barrel.