What to Watch

Looming Iran Decision Puts Floor in Oil Market

Growing expectations the U.S. will pull out of the Iran nuclear deal  by a self-imposed May 12 deadline helped oil prices stay mainly steady Thursday morning.

If Mr. Trump were to abandon the deal it would result in the reimposition of economic sanctions on Iran, hindering the OPEC country’s oil output and reducing global supply.

“The main sanctions that impact the oil market are U.S. restrictions on foreign banks that carry out transactions with Iran’s central bank and exemptions only being granted if importers significantly reduce imports of Iranian crude,” said Edward Bell, analyst at Dubai-based Emirates NBD Bank.

Brent crude, the global oil benchmark, was down 0.16% to $73.24 a barrel on London’s ICE Futures exchange, having peaked at $75.47 last week–its highest level since 2014. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.07% at $67.98 a barrel.

Energy News

Tesla Burns Through Cash

Electric-car maker Tesla Inc.’s free cash flow ballooned to around negative $1 billion in the first quarter, reports The Wall Street Journal’s Tim Higgins.

“Despite the increased spending, Chief Executive Elon Musk indicated the company won’t need to raise more money because it is still on pace to make about 5,000 Model 3s in a single week by around the end of the second quarter,” Mr. Higgins writes.

Oil-and-Gas Lobby Brings In Outsider as New Chief

 The American Petroleum Institute, the largest oil-and-gas industry trade association in the U.S., tapped Mike Sommers, a lobbyist for the private-equity industry and a former chief of staff to former House Speaker John Boehner, to be its head lobbyist, reports The Wall Street Journal’s Timothy Puko.

“I think that if people are concerned about volatility, they should definitely not buy our stock.”

Elon Musk, chief executive at Tesla Inc.

Energy Firms to Build Terminal for World’s Biggest Tankers

Three U.S. energy logistics firms—Buckeye Partners, Phillips 66 Partners and refiner Andeavor—formed a joint venture to build a terminal for handling very large crude carriers at the Port of Corpus Christi in Texas, reports The Wall Street Journal’s Costas Paris.

Big Number

436 Million Barrels

U.S. crude stockpiles climbed by 6.2 million barrels for the week ended April 27, to 436 million barrels, the U.S. Energy Information Administration reported Wednesday.

FutureCurve

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

Tuesday: The American Petroleum Institute releases weekly U.S. petroleum inventory data.

May 14-17: KNect365 hosts Flame, Europe’s main midstream gas and LNG event, in Amsterdam.

Reporter’s Notebook

Wall Street Journal reporter Dan Molinski on U.S. crude prices. Crude oil in the Permian Basin of West Texas and New Mexico keeps getting cheaper as soaring production makes a pipeline shortage problem there more acute. Oil Price Information Service said this morning that Midland WTI was fetching a price of just under $57 a barrel, compared with around $67.20 for WTI near-term futures benchmarks. Operational issues at Alon’s Big Spring refinery in West Texas may be partly to blame, but the double-digit discount for Permian crude also happened late last month which suggests a chronic problem. The problem could worsen since the Energy Information Administration said U.S. oil production — which is being driven by Permian output — hit another record high 10.6 million barrels per day last week.

Wall Street Journal reporter Erin Ailworth on the U.S. gas industry. Natural gas power plants have been getting the thumbs down from energy officials in California. A gas pipeline looks to be next. The California Public Utilities Commission on Wednesday issued a proposal that, if adopted at a June meeting, would deny a request by San Diego Gas and Electric and Southern California Gas Co. to build a new 47-mile-long gas transmission line to replace a smaller one. The proposed decision from a law judge at the utilities commission says the companies “have failed to demonstrate that there is a need” for the new $639 million line.