What to Watch

Oil Prices Support Statoil’s Results

The oil-market’s recovery last year has lifted the earnings of a recent crop of oil firms including Norway’s Statoil ASA on Wednesday, and smaller shale producers, despite the setbacks reported by America’s biggest oil companies Exxon Mobil Corp. and Chevron Corp.

Statoil raised its dividend on Wednesday after exceeding market expectations for its fourth quarter, writes Dominic Chopping for Dow Jones Newswires.

The 67% state-owned company said its net profit for the three months through Dec. 31 was $2.58 billion, compared with a net loss of $2.79 billion a year earlier. Analysts had expected a net profit of $1.23 billion. Revenue rose 35% on the year to $17.11 billion, against expectations of $16.01 billion.

The company raised its quarterly dividend 4.5% to $0.23 a share.

Statoil’s share price rose nearly 3% in early trading in Oslo Wednesday.

U.S oil producers such as Anadarko Petroleum Corp and rival Pioneer Natural Resources Co. have also reported results that beat investor expectations.

Pioneer said on Tuesday it will return money to shareholders and also plans to shed all oil and gas assets outside the Permian, including properties in the Eagle Ford Shale, Raton, NM and the Texas Panhandle, reports the WSJ’s Lynn Cook.

Meanwhile, energy futures stabilized on Wednesday.

Brent crude, the global oil benchmark, fell 0.3% to $66.60 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.2% at $63.21 a barrel.

Energy News

British Columbia’s Wine Is a Casualty of a Pipeline Fight With Alberta

Canada’s oil-rich province of Alberta stopped buying wine from neighboring British Columbia on Tuesday, as the latter province has put up roadblocks to the expansion of a crude pipeline owned by Kinder Morgan.

Rio Tinto Increases Buyback, Pays Record Annual Dividend

 Rio Tinto PLC, the world’s No. 2 mining firm, said it would buy back morestock and pay a record annual dividend as the mining company reported a 90% rise in profit for 2017.

The company’s profits were buoyed by last year’s rising commodity prices but the firm would be wise to hold on to some of its bounty as the commodity bull run might not be repeated, writes Nathaniel Taplin for Heard on the Street.

“We clearly have a growth agenda”

– Jean-Sebastien Jacques CEO of Rio Tinto Group

Iraq Works to Send Oil to Iran

Iraqi forces on Wednesday pushed to clear insurgents from a planned oil transport corridor to Iran, Reuter’s reports.

WSJ Energy In-Depth

As Cobalt Prices Rise, Congo Raises Pressure on Western Mining Giants

Congo’s state-owned mining firm, Gécamines SA, signaled a potential change in its mining code that could roil the extractive industry, write Alexandra Wexler and Scott Patterson.

Gécamines Chairman Albert Yuma Mulimbi told The Wall Street Journal that Congo hadn’t benefited enough from its mining production.

The country is Africa’s biggest copper and cobalt producer but also one of the world’s poorest countries, with an annual budget of roughly $5 billion.

Mr. Yuma alleged that companies had manipulated costs and production figures, resulting in lower dividends and royalty payments to the Congolese government.

It wasn’t immediately clear whether Mr. Yuma’s comments signaled a formal shift in government policy or a gambit to renegotiate contracts on more preferential terms with firms such as Glencore PLC, Randgold Resources and Ivanhoe Mines Ltd. that operate in the Congo.

Big Number

11 million

U.S. oil production is forecasted to reach 11 million barrels per day in the fourth quarter of 2018, according to data from the Energy Information Administration.

FutureCurve

Wednesday:The U.S. International Energy Administration releases official weekly data on U.S. crude stocks.

Thursday: France’s Total reports its financial results for the fourth quarter and the full year of 2017.

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

Reporter’s Notebook

WSJ Reporter Dan Molinski on the future of coal. Coal has taken its lumps recently, but the EIA’s recent Annual Outlook still sees it playing an important role in US electricity generation as far out as 2050 and beyond, a view some analysts dispute. The report shows natural gas output quickly rising to become the undisputed main source of electricity, and while it no longer sees coal use growing, it does see relatively steady consumption. Alex Gilbert with Washington-based energy research group SparkLibrary says the EIA projection is “flat-out wrong” because coal plant retirements will keep happening until none are left. “My best guess is we’re going to lose half of the coal fleet” by 2050, he tells WSJ.

WSJ Reporter Christopher Alessi on geopolitical risk in the oil market. Global risks to the oil market, including a compromised supply chain and instability in the Middle East, could result in a spike in the oil price this year, according to Richard Robinson, manager of the Ashburton Global Energy fund. “The combination of more balanced inventories, the low number of projects delivering first oil between 2019-2021, years of slashed maintenance spend and empty government coffers in producing countries is contributing to a significant rise in the oil risk premium,” Mr. Robinson wrote in a note Tuesday. At the same time, political tensions in major oil producing countries in the Middle East like Iran is putting upward pressure on prices.