OIL MARKETS EDGE HIGHER AHEAD OF FRESH U.S. DATA
Oil prices recovered slightly after the weeklong rally fizzed overnight on fresh data that showed U.S. production would continue to trend higher this year and ahead of an update on global oil inventories.
Brent crude, the global oil benchmark, rose 0.5% to $48.65 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.4% at $46.19 a barrel.
Total U.S. shale production will likely notch a 113,000 barrels a day rise in August from the previous month to hit 5.585 million barrels a day, according to the Energy Information Administration. If confirmed, this would mark an eighth straight month of gains.
Investors are awaiting stocks data from industry group the American Petroleum Institute, due later Tuesday.
The increases come as the market remains concerned about still-bloated global inventories, which show little sign of shrinking despite an ongoing production cut pact by the Organization of the Petroleum Exporting Countries and other heavyweights, such as Russia.
U.S. SAYS IRAN COMPLYING WITH NUCLEAR DEAL
The Trump administration alerted Congress late Monday that Iran is complying with the international accord to curb its nuclear ambitions, reports Felicia Schwartz.
The notification came after deep resistance within the administration over certifying Iran’s compliance with a deal that President Trump has referred to as “terrible.”
At the same time, the administration is expected to impose new sanctions on Iran on Tuesday. Iran, one senior administration official reportedly said, is “in default of the spirit” of the nuclear agreement.
TESLA EXPANDS BOARD
Tesla announced it has appointed 21st Century Fox Inc. Chief Executive James Murdoch and Ebony Media Chief Executive Linda Johnson Rice to its board, reports Tim Higgins.
The appointments followed criticism by investors, including the California State Teachers’ Retirement System, who called for more independent directors and improved corporate governance.
Tesla Chief Executive Elon Musk is “under intense scrutiny as he races to ramp up production of the Model 3, a new $35,000 sedan that he expects will fuel massive sales growth next year. He has projected Tesla will make a total of 500,000 vehicles in 2018, up from about 84,000 last year,” Mr. Higgins notes.
Ensco BONDHOLDERS COULD RESIST DEAL WITH ATWOOD
Some bondholders of Ensco PLC, an offshore contract drilling company, are weighing whether to protest the group’s plan to buy smaller rival Atwood Oceanics Inc., reports Soma Biswas, citing a person familiar with the matter.
Ensco has agreed to pay off $1.3 billion in Atwood’s debt, which has alarmed bondholders already concerned that the low oil price environment and reduced spending on offshore drilling might mean Ensco could face a “cash crunch” in the future.
“Over the past year, many offshore oil drilling companies with high debt loads have filed for bankruptcy or restructured debt out of court as demand and rates paid by oil producers to hire out the rigs have crashed,” Ms. Biswas notes.