What to Watch

Total Seeks Its Latest Electricity Deal

 France’s Total SA on Wednesday said it would pay $1.73 billion  for a majority stake in electricity provider Direct Energie, writes The Wall Street Journal’s Sarah Kent.

The oil giant is among the most aggressive in a small coterie of big oil-and-gas companies that are snapping up traditional utilities and renewable-energy firms.

The moves represent a strategic shift among big oil players, grappling with how to manage the potential for a long-term shift away from fossil fuels and the more immediate pressure of finding a market for growing supplies of natural gas.

Total aims to supply 7 million customers with electricity across France and Belgium by 2022.

The deal is “in line with our ambition to become the responsible energy major,” Total Chief Executive Patrick Pouyanne said in a statement.

Energy News

Oil Rises on Signs of Falling Inventory

 Falling U.S. petroleum stocks supported oil prices on Wednesday.

Brent crude, the global benchmark, was up 0.68% at $72.07 a barrel on London’s Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.83% at $67.07 a barrel.

Overall, rising global tensions, including U.S. sanctions against Russia and the continuing conflict in Syria, have sparked a steep rally in commodities, sending materials from aluminum to oil to fresh multiyear highs.

 

Venezuela Detains Two Chevron Executives

The oil giant Chevron Corp confirmed on Tuesday that two of its executives were arrested by Venezuelan officials. The move appears to be the first time the country’s authorities have detained workers attached to a foreign oil firm.

“I’m optimistic that the United States government can set the conditions for that appropriately so that the president and the North Korean leader can have that conversation [that] will set us down the course of achieving a diplomatic outcome…America and the world so desperately need.”

– Mike Pompeo, director for the U.S. Central Intelligence Agency

 Big Number

 9 million

China imported over 9 million barrels a day of crude oil in March, according to official figures.

FutureCurve

Today: IQPC hosts the Oil & Fuel Theft Summit in Geneva which concludes on Thursday. Speakers include Mahmoud Al-Bayati, the director general for counter-terrorism for Iraq, William J. Waggoner, the chief executive of the Mexico Petroleum Company and Daniel Gianfalla, a member of the national maritime security advisory committee at the U.S. Department of Homeland Security.

Reporter’s Notebook

The WSJ’s Bradley Olson on how gas production is affecting parts of the U.S. shale patch. Possible regulations on surging natural gas production in West Texas and New Mexico have the potential to threaten growth in the region, according to Tudor Pickering Holt & Co. The industry is relying on the Texas Railroad Commission to allow flaring to burn off the excess gas, but the regulator’s official policy remains “unclear to all involved parties,” Tudor Pickering said. If flaring is not allowed, wells are likely to be shut in based on the ability of different operators to take gas to market, according to Tudor Pickering.

WSJ reporter Erin Ailworth on the growth of wind energy in the U.S. Electricity generated by wind farms is on the rise, with 14 U.S. states getting more than 10% of their power from wind in 2017, according to an annual market report from the American Wind Energy Association. Wind generated more than 30% of the electricity in four states: Iowa, Kansas, Oklahoma, and South Dakota. “Don’t be surprised when the industry continues to break records,” said Tom Kiernan, chief executive of AWEA. Texas remained the No. 1 state for installed wind power capacity, with more than 20 gigawatts installed – far more than any other state.

WSJ correspondent Chris Alessi on the price differences in African crude grades. West African crude differentials have “come under pressure” recently, amid weaker Chinese demand, according to analysts at consultancy JBC Energy. “Nemba Blend, which has been the most popular [West African] crude for Chinese buyers since January 2017, has seen its differential to Dated Brent fall by over 60 cents since the start of March to a discount of 20 cents per barrel,” the analysts wrote in a note Monday. Citing a backlog of tankers anchored offshore of Shandong, the analysts conclude that the “apparent glut may be a knock-on effect from seasonally lower runs, which are showing up some infrastructure bottlenecks given continuously high import levels.” But, they add, Chinese refinery maintenance season should peak this month.