What to Watch

Oil Gains on Iran Turmoil

Crude prices ticked up Wednesday fueled by antigovernment protests in oil-rich Iran.

Brent crude, the global benchmark, was up 0.60%, at $67.96 a barrel on London’s Intercontinental Exchange . On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.45% at $60.65 a barrel.

Demonstrators have taken to the streets in cities across Iran over the past week to voice anger over the country’s economic woes.

 

The protests, which have left more than 20 people dead, have reignited a geopolitical risk premium in global oil markets amid concerns the civil unrest could result in crude supply disruptions out of the Islamic Republic.

 

The “potential escalation out of Iran” is supporting oil prices, said Ole Hansen, head of commodity strategy at Saxo Bank.

 

Energy News

Israeli Pipeline, Once a Link to Iran, Shrouded in Secrecy

 

An oil pipeline company established decades ago by Israel and Iran, and a new Israeli entity meant to replace it, can continue to operate secretly, said Israeli authorities in December.The Eilat-Ashkelon Pipeline Co.  was a joint venture set up in 1968, when the two nations were friendly. Israel, worried about national security, maintains tight control over information related to the pipeline.

 

What Investors Need to Know About Europe’s New Trading Rules

 

A new set of rules– MiFID II — that changes how assets from stocks to commodities are traded and investors’ money is managed entered into force on Wednesday. Regulators say it will protect investors and boost transparency.

 

“Will someone from his depleted and food starved [North Korean] regime please inform him that I too have a Nuclear Button, but it is a much bigger & more powerful one than his, and my Button works!”

U.S. President Donald Trump

 

 

Gas Market Feels the Chill

Fueled by the holiday deep freeze, natural-gas futures prices continuedtheir late December rally into the new year, rising 17% over just seven trading sessions, writes Spencer Jakab for Heard on the Street.

 

WSJ Energy In-Depth

 

Venezuela Misses Another Debt Payment, Raising Stakes for Bondholders

 

Venezuela has defaulted on another debt obligation, according to S&P Global Ratings, intensifying investor fears about the country’s ability to make more than $9 billion in bond payments due in 2018, writw Julie Wernau and Imani Moise.

 

Venezuela’s oil-rich econcomy has been hurt by a recession that has left the country and its state oil firm Petróleos de Venezuela SA, known as PdVSA, saddled with several billions of dollars of debt.

 

The ratings firm said Tuesday that Venezuela failed to make $35 million in coupon payments for its bonds due in 2018 within a 30-day grace period. The government and PdVSA are now behind on $1.28 billion in payments, according to investment firm Caracas Capital. S&P said there is a one-in-two chance that Venezuela will default on payments due within the next three months.

 

Venezuelan President Nicolás Maduro has insisted Venezuela will pay off its near-term obligations. The government also has said it wants to restructure all remaining debt, which analysts put as high as $150 billion.

 

Big Number

 

1,000

The U.S. total rig count will reach above 1,000 rigs in 2018, for the first time since April 2015, according to Stewart Glickman head of energy research at CFRA. Rig counts ranged from 660 to 960 in 2017.

FutureCurve

 

Wednesday: The U.S. Energy Information Administration releases its weekly petroleum status report.

 

Friday: Oil-services firm Baker Hughes Inc. releases its count of active drilling rigs, a bellwether for production in the U.S. oil industry.

 

Reporter’s Notebook

 

In a shake-up for natural gas markets, winter arrived big-time this weekend to the region east of the Rockies, with temperatures today in high-population centers like Dallas a good 20 degrees colder than Anchorage, Ala. “The below-normal temperatures have caused natural gas and oil production freeze-offs in producing areas while demand in major heating markets has soared,” says BTU Analytics, according to WSJ correspondent Dan Molinski.

 

Analysts are offering mixed reviews of the surprise sale Friday by Weatherford of its hydraulic fracturing fleet to rival Schlumberger. The two company’s scrapped a previously announced joint venture and instead announced a straight asset sale of Weatherford’s pressure pumping equipment to Schlumberger for $430 million. Bernstein said in a note Tuesday that Weatherford had prioritized short-term cash as it tries to pare down debt over long-term value in the joint venture. Schlumberger gained substantial fracking equipment at a reasonable price, Bernstein said. Tudor Pickering Holt said the deal was a win for Weatherford because its fracking fleet is in disrepair and the transaction allowed it to jettison the equipment at a good price, writes Houston-based reporter Christopher Matthews.