What to Watch

Brent Breaches $75 a Barrel

 Crude prices climbed to more than a three-year high Tuesday morning amid fresh signs the U.S. could withdraw from an international agreement to curb Iran’s nuclear program. Such a move would likely lead to a reimposition of economic sanctions on Iran, frustrating its oil output and weighing on global supply.

Brent crude, the global benchmark, surpassed $75 a barrel in early morning trade, before retreating slightly. The price of Brent on London’s Intercontinental Exchange was up 0.27% at $74.91 a barrel late morning. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.48% at $68.97 a barrel.

“Let’s assume [President Donald Trump] will withdraw from the [Iran] deal on May 12, we don’t know how much volume will be lost, we might see the $80 level for Brent,” said Giovanni Staunovo, a commodities analyst at UBS Wealth Management.

Energy News

U.S. Crude Near $70 a Boon for U.S. Economy

 As West Texas Intermediate futures, the U.S. crude benchmark, rose towards the symbolic $70-a-barrel marker, economists said the U.S. economy stands to benefit, reports The Wall Street Journal’s Ben Eisen.

FirstEnergy Strikes Bankruptcy Deal

 U.S. electric utility FirstEnergy Corp. reached an agreement with creditors of its bankrupt power-generation businesses that would allow it to pull out of pursuing a more cumbersome chapter 11 bankruptcy filing, reports The Wall Street Journal’s Andrew Scurria.

Electric Buses Weigh on Oil Industry

 City buses with battery-powered motors, led by a high rate of adoption in China, are starting to replace diesel-run buses and undermine demand for fossil fuels, Bloomberg reports.

WSJ Energy In-Depth

Oil Field Service Companies to Benefit From Oil Rally

 Oil field service providers like Halliburton Corp., Schlumberger Ltd. and Baker Hughes, a subsidiary of General Electric Co. have yet to benefit from robust gains in oil prices over the past year—but that is about to change, reports Spencer Jakab.

Growth for these service providers has been centralized in the U.S. shale basin, which has actually hampered companies like Haliburton to profit, as demand has overwhelmed rail capacity and a shortage of trained truck drivers has led to bottlenecks and cost increases.

But now “investor patience should pay off,” writes Mr. Jakab. As bottlenecks get sorted out, higher prices “will go a long way toward helping customers dig deep and pay for services accordingly.”

Big Number

$1.8 Million

The American Petroleum Institute, an industry group for the U.S. oil-and-gas sector, reported it spent $1.8 million on lobbying in the first quarter of this year, a small increase from the prior quarter, according to Axios.

FutureCurve

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

Wednesday: The U.S. Energy Information Administration puts out its weekly oil stocks data.

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

Reporter’s Notebook

Wall Street Journal reporter Dan Molinski on the WTI price rise. Even as WTI oil prices edge toward $70 a barrel the West Texas cash price remains in the low $60s, according to Oil Price Information Service, as excessive production combined with pipeline shortages create transportation troubles. “Spring weather is bringing plenty of oil to the surface from new wells, or from restarted DUCs–drilled but uncompleted wells,” OPIS said. “The price of crude oil FOB Midland has dropped to $6.60 bbl under June WTI futures, putting the cash price in West Texas at $63.04/bbl based on the NYMEX June settlement of $68.64/bbl.” Nonetheless, companies with guaranteed pipeline space are doing fine, and even those without are mostly happy since the discounted price still exceeds any price just a few months ago.