OIL GAINS ON TALK OF SAUDI EXPORT CUT
Oil prices were up slightly Tuesday supported by reports that Saudi Arabia, the world’s top exporter of crude-oil, is planning to cut exports to Asia next month, write The Wall Street Journal’s Christopher Alessi and Jenny W. Hsu.
Brent crude, the global benchmark, rose 0.46%, to $52.58 a barrel, in London midmorning trading. On the New York Mercantile Exchange, West Texas Intermediate futures were up 0.55%, at $49.63 a barrel.
Saudi Arabia—the world’s largest producer of crude oil—is expected to cut sales of oil supplies to Asia by up to 10% in September, to tackle the global crude glut, according to multiple reports.
INVESTORS PONDER OIL RALLY’S STAYING POWER
However even the potential of a Saudi rescue of the oil market may not be sufficient to keep investors from worrying about crude’s fortunes.
“U.S. oil futures have risen 16% since falling into bear market territory in June. Prices exceeded $50 a barrel for the first time in two months in July, but have been unable to hold above the closely watched level as supply concerns have seeped back into the market,” write Stephanie Yang and Alison Sider.
Rising production from the Organization of the Petroleum Exporting Countries, despite efforts to reduce output, has raised worries that members will be unable to keep to levels agreed on last year in a deal to cap output. The cartel will discuss compliance levels at a two-day meeting in Abu Dhabi this week.
A GUSHER OF OIL CASH SPRINGS FROM SUNCOR
Despite the downturn in oil some Canadian firms are in good shape, writes Spencer Jakab for Heard on the Street.
“Canada’s oil sands are dirty, costly and the opposite of fast money shale drilling, but the companies that mine them generate gushers of cash and are some of the biggest bargains in the stock market.
Canada’s Suncor Energy is among the world’s higher cost producers of oil. By all rights, it should have scaled back its ambitions during the past few difficult years. Instead, it did the opposite, buying out partners on the cheap and plowing ahead with projects that could pay off for decades,” the Journal reports.
SOUTH CAROLINA SEEKS WAYS TO SALVAGE NUCLEAR PROJECT
Meanwhile, the state of South Carolina is scrambling to salvage a nuclear plant in construction after an energy firm abandoned the project, write Valerie Bauerlein and Russell Gold.
Last week, Scana Corp. said it would walk away from its project to build two nuclear reactors in tiny town of Jenkinsville—after nine years and $10.4 billion spent.
“The move left Jenkinsville, population 71, with an unfinished worksite the size of 1,000 football fields, while electric customers continue to pay 18% of their bill for a nuclear-power plant that may never generate a single kilowatt,” writes the Journal.
Scana said its decision to exit the project was precipitated by the March bankruptcy of main contractor Westinghouse Electric Co. and a recently completed assessment that showed the cost of building the facility increased to $25.7 billion from $14 billion.
“The decision to abandon the plant shows the challenges of building nuclear power. These projects take years to execute, while energy markets are changing quickly,” the Journal reports.
Now South Carolina’s authorities are pursuing a number of options to try and ensure that at least one of the two reactors gets up and running.