What to Watch

Crude Holds Gains on Iran Unrest, Falling U.S. Stocks

 Oil prices rose Monday, holding on to robust gains made last week on tighter stocks in the U.S. and perceived risks to global supply.

Brent crude, the global benchmark, was up 0.25% at $67.78 a barrel on London’s Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.54% at $61.77 a barrel.

Prices climbed to near three-year highs last week amid anti-government protests in Iran, declining U.S. crude stockpiles, freezing winter weather in the U.S. Northeast and continued high levels of compliance with the Organization of the Petroleum Exporting Countries’ plan to cut crude output, according to analysts at Commerzbank.

Energy News

U.S. Oilfield Service Firms Dust Off IPO Plans as Crude Prices Surge

 Liberty Oilfield Services, which provides hydraulic fracturing services to shale producers, last week filed to raise about $160 million through an initial public offering of part of its shares, Reuters reports. If its IPO performs well, it could open the gates for several other companies aiming to raise funds for new expansion or to buy rivals.

Iran Tanker Leaks Off China’s Coast

A massive Iranian oil tanker was ablaze and leaking fuel in the East China Sea on Sunday after colliding with a large Chinese cargo ship, the WSJ’s Costas Paris reports. Maritime officials feared a large spill since the tanker was carrying nearly as much oil as the Exxon Valdez, which spilled 260,000 barrels into Prince William Sound off Alaska in 1989.

“With volatile oil prices, it makes sense for small oil companies to merge as getting bigger scale gives them balance sheet to face volatility”

Thomas Streater, head of research at MB Commodities Capital in Dubai

Wind Fight Goes to Court

In a trial beginning on Monday, federal prosecutors accuse Chinese wind-turbine maker Sinovel Wind Group Co. of stealing the source code for software that controls wind turbines from American Superconductor Corp. The trial in U.S. District Court for the Western District of Wisconsin could result in billions of dollars in fines for Sinovel, which has previously denied wrongdoing.

WSJ Energy In-Depth

Iran Nuclear Deal Faces Risks From White House

 President Donald Trump is set to make a series of decisions this week that could destabilize the the 2015 nuclear agreement with Iran, writes Felicia Schwartz.

Mr. Trump is expected to again notify Congress he doesn’t believe the Iran deal is in the best interest of the U.S., restating a well-known position.

More importantly, Mr. Trump will have several opportunities starting Wednesday to refuse to extend U.S. sanctions relief to Iran under the deal, which would put Washington in breach of its terms.

Iran boosted its oil production after international sanctions against the nation were removed in early 2016 as part of a deal with six world powers where Tehran curbed it nuclear program.

The recent protests in Iran have added to the uncertainty, as Mr. Trump has backed protesters while denouncing the economic benefits he says the nuclear agreement has provided to Tehran.

Big Number

11

Saudi authorities arrested 11 princes for criticizing the government, the latest indication that the country’s rulers are moving to stamp out internal dissent as they push through reforms to diversify the kingdom’s oil dependent economy

FutureCurve

Tuesday: The American Petroleum Institute releases its forecast of U.S. crude inventories.

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

Reporter’s Notebook

WSJ correspondent Erin Ailworth on energy use during the U.S. cold snap. Days of extreme cold are expected to follow the bomb cyclone that battered the Northeast, a forecast that concerns power grid officials in New England worried about fuel supplies. Natural gas is usually the main way electricity is produced in the region, but high demand during the cold snap has put pressure on gas pipelines and pushed up prices for the fuel. As a result, oil-generators are playing a much bigger role. Data from ISO-New England showed oil at the top of the grid’s fuel mix Friday, accounting for more than 35% of electricity generated; it typically accounts for about 1%. “The sustained cold is requiring round-the-clock usage of some of these oil-fired generators and some are already running short on fuel,” an ISO-New England spokeswoman said.

Houston-based reporter Christopher Matthews on unmanned drilling. Automated drilling is coming to the oil patch in 2018, according Tudor Pickering Holt. Drilling oil wells has long been more art than science, especially for directional drillers who help construct horizontal wells in shale plays, drilling through complex layers of rock. But a handful of service companies have been investing in digital drilling technology over the last year, and 2018 will see it roll out. Tudor Pickering says to be on lookout for National Oil well Varco’s rig operating system, Schlumberger’s “rig of the future,” Helmerich & Payne’s recent acquisition of software-driven Motive Drilling Technologies and others.