What to Watch

Marathon Petroleum to Purchase Andeavor

 

Marathon Petroleum Corp., the second largest refiner in the U.S., plans to buy pipeline and refining group Andeavor for more than $20 billion, report The Wall Street Journal’s Dana Cimilluca and Dana Mattioli.

 

The cash-and-stock deal values Andeavor at around $150 a share, a roughly 23% premium over the group’s closing price on Friday, according to people familiar with the matter. An official announcement is expected Monday.

 

“Part of the rationale of the deal centers on the companies’ complementary footprints; with Marathon in the East and Andeavor in the West, regulatory approval could be easier to win,” the reporters noted.

 

Energy News

 

 

Oil Edges Down

 

An uptick last week in the number of rigs drilling for oil in the U.S. helped push crude prices lower Monday morning.

 

Brent crude, the global benchmark, was down more than 1% at $73.85 a barrel on London’s Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down by more than 1% at $67.39 a barrel.

 

Aramco Adds First Female Director

 

State-owned Saudi Arabian Oil. Co, known as Aramco, said Sunday it would augment its board with three non-Saudi members, including its first-ever female director, as it plans for a public listing, The Wall Street Journal’s Summer Said reports.

 

“Overall, there is really only one theme in the market—and that is Iran vs. Trump”

 

Ole Hansen, Chief Commodity Strategist, Saxo Bank.

 

Russia Sends More Oil to China

 

Russia—the world’s largest oil producer—is sending an increasing amount of crude to China, at the expense of European importers, Bloomberg reports.

 

WSJ Energy In-Depth

Big Oil Shows Restraint on Drilling

 The world’s biggest oil companies are back in the black—with western giants like Exxon Mobil Corp, Chevron Corp. and Royal Dutch Shell PLC posting their best first-quarter profits in years—but most are refraining from investing in new drilling projects, report Bradley Olson and Sarah Kent.

“Large publicly traded oil companies are moving carefully because they are under pressure from investors after spending heavily over the past decade when prices were higher, only to generate underwhelming returns,” Mr. Olson and Ms. Kent write.

Big Number

825

The number of rigs drilling for oil in the U.S. rose by five last week to reach 825, according to Baker Hughes.

FutureCurve

Today: The U.S. Energy Information Administration releases its monthly petroleum supply report.

Tuesday: The American Petroleum Institute, an industry group, releases weekly data on U.S. crude inventories.

Reporter’s Notebook

Dow Jones reporter Marc Bisbalarias on Eni’s first quarter. Eni should deliver higher profitability and faster production growth and free-cash-flow generation, Goldman Sachs says. It says the oil-and-gas company’s pipeline of projects is accelerating towards peak production. Free cash flow, which the company has consistently improved since the oil-price downturn, was Eni’s highest since 2012 in the first quarter, the bank says. Shares trade at €16.13 ($19.56), down 0.2%.

Wall Street Journal reporter Robb Stewart on the Australian energy market. Oil Search is likely to see an undersize hit to production from February’s big quake in Papua New Guinea, with both production lines at the PNG LNG venture now up and running. Macquarie doesn’t expect further disruptions to output this year, since all 2018 maintenance and scheduled downtime was completed during the recent interruption. Oil Search remains Macquarie’s preferred stock in the sector.