What to Watch

Trump’s Shifting Iran Rhetoric Jolts Oil Market

President Donald Trump on Tuesday again suggested the U.S. could withdraw from a 2015 international agreement to curb Iran’s nuclear program by a self-imposed May 12 deadline, calling the deal “insane” and “ridiculous,” report The Wall Street Journal’s Michael C. Bender and Stacy Meichtry.

There is growing consensus in the oil market that Mr. Trump will pull out of the deal, triggering a reimposition of economic sanctions that would frustrate the Islamic Republic’s oil output and limit global supply. Such sentiment pushed Brent crude above $75 a barrel for a time yesterday for the first time in over three years.

However, Mr. Trump, meeting with French President Emmanuel Macron at the White House Tuesday, also signaled interest in an unspecified new deal to rein in Tehran. Those comments sent prices tumbling, with Brent closing down 1.14%.

Crude prices inched higher Wednesday morning on expectations that the U.S. Energy Information Administration will later Wednesday report declining petroleum inventories before falling early afternoon, with Brent down 0.15%, at $73.75 a barrel on London’s Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.07%, at $67.66 a barrel.

Energy News

Scientists Say North Korea Nuclear Test Site Mostly Unusable

 A large portion of North Korea’s underground nuclear testing facility is unusable as a result of a collapsed cavity inside the mountain, according to a new study by Chinese scientists, reports The Wall Street Journal’s Jeremy Page.

Statoil Earnings Jump on Higher Oil Prices

 Norway’s Statoil on Wednesday posted its highest net profit since 2014, pulling in $1.47 billion for the first quarter of this year, Bloomberg reports.

“No matter the decision now that President Trump will take, I would like us to work…on a new deal.”

French President Emmanuel Macron on the 2015 Iran nuclear accord

 EPA Pushes for New Rules to Rely Only on Public Data

The U.S. Environmental Protection Agency said Tuesday it plans to restrict research used in developing regulations to studies that make their raw data public, while limiting the use of findings that can’t be produced by others, reports The Wall Street Journal’s Heidi Vogt.

The shift has the potential to affect rules governing everything fromhousehold products to power-plant emissions.

 Big Number

 1.7 Million

The U.S. Energy Information Administration’s weekly data on U.S. petroleum inventories is expected to show a 1.7 million barrel decline in crude stocks for the week ended April 20, according to analysts surveyed by The Wall Street Journal.

FutureCurve

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

FridayBaker 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 U.S. pipeline construction. Phillips 66 Partners says it has decided to proceed with construction of the Gray Oak crude oil pipeline system from West Texas to the Gulf Coast after receiving “sufficient binding commitments” from customers that will use it. Oil companies in West Texas have increased production sharply in recent months to take advantage of higher oil prices, only to realize there aren’t enough pipelines to transport the increased volume out of the lightly-populated region. That’s forced many to sell their oil at cheaper rates. But while Phillips’ new pipeline could ultimately move 1 million barrels per day and help relieve the bottlenecks, it won’t be ready for service until the end of next year.

Wall Street Journal reporter Christopher Alessi on quarterly earnings. First quarter earnings for integrated oil-and-gas majors “should be more muted,” even though oil prices have “shot ahead in recent weeks, fueled by strong demand growth, continued excellent OPEC compliance and rising political risks,” according to analysts at Macquarie Capital. The bank forecasts an average of 20% earnings-per-share growth for the oil majors combined. “With Brent oil prices rising by 25% y-o-y it is the more oil price sensitive names that should be the winners in the quarter,” including Norway’s Statoil, the analysts write in a note. The downstream has “lagged” in the first quarter, as refining margins have fallen, which should weigh on the more integrated companies like BP, Shell and Total, the analysts say.