What to Watch
Trump Faces Test on Coal With FirstEnergy Appeal
President Donald Trump’s bet on coal is being tested by a coal utility’s bankruptcy and plea for help, writes The Wall Street Journal’s Timothy Puko.
FirstEnergy Corp.’s fleet of coal- and nuclear-power plants filed for bankruptcy over the weekend, just days after the company asked the federal government for an emergency declaration that would keep many of them open.
That forces the Energy Department to decide whether to intervene under a lightly used, 83-year-old law and compel the nation’s largest electric-grid operator to dispatch power from FirstEnergy’s coal and nuclear plants effectively before any other.
Banks Forecast Gains for Crude Oil
Banks projected a rise in crude’s fortunes for the sixth month in a row in March, in a sign they expect the oil market to further balance out in the coming months.
Brent crude—the global benchmark—is now expected to average $63 a barrel this year, while West Texas Intermediate, the U.S. standard, should average close to $59 a barrel, according to a poll of 15 investment banks surveyed by The Wall Street Journal toward the end of March.Both estimates are about $1 higher than the February survey’s forecast.
Meanwhile, oil prices rose on Monday, holding near$70 a barrel, underpinned by a slowdown in U.S. drilling activity and falling global stocks.
Russia’s Oil Production Hit a Peak in March
Russia’s crude production edged up in March to an 11-month high of 10.97 million barrels a day, above an allowance agreed to by Moscow with the Organization of the Petroleum Exporting Countries to eliminate about 2% of global supply.
“Fuel oil markets have entered the long shadow of the IMO’s low-sulphur ship fuel rules. The transition to cleaner fuel will be guided by market prices.”
– Analysts for Energy Aspects
China Retaliates Against Trump’s Tariffs
China tariffs on a range of U.S. goods, took effect on Monday. Beijing is following through on a promise to retaliate against the Trump administration’s penalties on imports of Chinese steel and aluminum. The Asian country slapped penalties ranging from 25% on American pork and eight other kinds of goods to 15% on fruit and 120 types of commodities.
WSJ Energy In-Depth
How Tillerson’s Exxon Designed an Oil Deal to Skirt Anticorruption Scrutiny
Exxon bought oil assets for $120 million in a 2013 deal in Liberia and thetransaction was structured to avoid triggering government scrutiny, writes the WSJ’s Scott Patterson, Bradley Olson and James V. Grimaldi.
There is a growing body of U.S. and European laws aimed at stamping out corruption around the world, and they have been aggressively enforced. The Exxon transaction shows the extent to which companies are structuring deals to try to minimize the risks of government review.
Exxon orchestrated an elaborate exercise to execute the transaction of much coveted crude assets.
A Canadian company would buy the rights from a Liberian oil operator whose ownership was murky. Then Exxon would buy a controlling stake in the project from the Canadian outfit, according to a presentation, documents outlining the deal and people familiar with the matter.
China’s energy giant Sinopec is aiming to increase its gas supply in the next six years, Reuters reports. The company wants to increase its production share of fuels that have lower carbon emissions and will therefore add 60 billion cubic meters of natural gas supply capacity, up from 27 billion cubic meters of gas in 2017.
Today: Major stock exchanges in London are closed in observance of a holiday.
April 18–19: IQPC hosts the Oil & Fuel Theft Summit in Geneva. Speakers include Mahmoud Al-Bayati, the director general for counter-terrorism for Iraq, William J. Waggoner, the Chief Executive Officer for the Mexico Petroleum Company and Daniel Gianfalla, a member of the national maritime security advisory committee at the U.S. Department of Homeland Security.