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DJ Global Energy Roundup: Market Talk

· 02/05/2021 12:20

The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.

1220 ET - European stocks close mixed following downbeat US non-farm payroll data and concerns about a potential return of market volatility sparked by retail-investor stock-buying. The Stoxx Europe 600 is flat, the FTSE 100 drops 0.2% and the DAX edges lower, though the CAC-40 and Italy's FTSE MIB finish the session 0.9% and 0.8% higher respectively. The price of a barrel of Brent crude increases 0.9% to $59.36. Some caution has returned to the equity markets after online brokerage Robinhood lifted trading restrictions imposed amid a battle between amateur investors and hedge funds, says CMC Markets. "The US non-farm payroll report was broadly negative," says CMC's David Madden. (philip.waller@wsj.com)

1119 ET - Double-digit inflation has come quickly to gasoline prices, with the average US price at the pump up 10.2% from Jan. 1, to $2.47 a gallon, and 17% higher since prices began surging in early November, according to price-tracking app GasBuddy. Rising oil prices that have jumped 16% year-to-date and are near a one-year-high $60 a barrel are fueling the spike in gasoline prices this winter, a season that typically sees lower fuel prices. GasBuddy's Patrick DeHaan tells drivers not to expect much relief on the horizon, and cautions "the real pinch could come in March and lasting through summer." (dan.molinski@wsj.com)

1012 ET - Boeing's orders and deliveries update on Feb. 9 should clean up the changes in the 777X backlog flagged in its recent 10K. Emirates and Qatar Airways are the likely the main source of the decline in firm deals to 191, Jefferies says. That duo and neighbor Etihad collectively account for 200 of the 309 orders listed on the Boeing website, the legacy of a joint deal from 2013 that envisaged the first planes arriving in 2020 rather than 2023. Lufthansa, SIA and ANA had 20 orders apiece, while Cathay Pacific and British Airways had 21 and 18, respectively. (doug.cameron@wsj.com; @dougcameron)

0846 ET - Natural gas prices continue a strong rally as they easily push above the $3 level, up 3.4% at a three-month-high $3.034/mmBtu. More winter storms continue to develop across the country, just when some began to think the cold weather was almost over for the season, and that's been the driving force behind the rally. "Nat gas markets have been waiting impatiently for cold weather patterns to take advantage, and they finally will in the coming weeks," say analysts at NatGasWeather.com. "The next four [weekly] EIA reports are expected to print much larger than normal draws vs the 5-year average due to the coldest temperatures of the past few years arriving." (dan.molinski@wsj.com)

0830 ET - US benchmark oil prices are rising again, up 0.8% at $56.70 a barrel and are more than 8% higher for the week, which would mark the biggest weekly gain in four months. Investors continued their crude-oil buying spree overnight after reports that Saudi Aramco decided to keep its official prices for Asia-bound crude unchanged. S&P Global Platts, citing traders, said the decision was expected, although it noted some market participants thought the company may cut prices. Investors next will turn to a weekly Baker Hughes oil rig-count report at 1 pm ET. The global benchmark Brent is 0.9% higher at $59.37 as it goes for a sixth consecutive session of gains. (dan.molinski@wsj.com)

0808 ET - The Norwegian krone has strengthened since November but remains undervalued and has scope for further gains in coming months, Bank of America says. BofA analysts expect EUR/NOK to fall to 9.90 by year-end from 10.3098 currently. The analysts say the krone should receive a boost from improved risk sentiment on the prospect of a global recovery as policies remain accommodative. The reopening of economies should also lift oil prices, supporting the krone, they say. "Third, we expect the Norges Bank to stick to its relatively hawkish guidance, pointing towards a hike by mid-2022, which is a reflection of the relatively good crisis it has had so far and its inflation outlook." (renae.dyer@wsj.com)

0744 ET - European oil and mining shares rise as crude prices gain amid fresh market optimism and lower oil stockpiles. BP, Eni, Repsol, Royal Dutch Shell and Total are all higher as the price of Brent edges towards $60 a barrel, up 1% at $59.45. U.S. light crude also rises 1% to $56.79. "The oil-price rally just keeps going," says Craig Erlam at forex trading firm OANDA. "It appeared to have stalled this time last week, but there's much more optimism in the markets this week. Larger inventory drawdowns and the determination of OPEC+ to rebalance the market rapidly, as per their comments this week following the monthly meeting, has further supported the recent moves." (philip.waller@wsj.com)

0623 ET - Brent crude oil is up 0.9% at $59.36 a barrel and WTI futures are up 0.9% at $56.73 a barrel, with both benchmarks on course for strong weekly gains of around 8% or more. With OPEC+ maintaining its production cuts at least for the time being and data on coronavirus infections, vaccines, and U.S. oil inventories all heading in an optimistic direction, prices have pushed higher this week. Saudi Aramco's surprise decision to hold steady official selling prices for Asia has also been taken by the market as another sign of strengthening demand, says Commerzbank's Eugen Weinberg. (david.hodari@wsj.com; @davidhodari)

0545 ET - Anglo American stands out from its mining peers owing its exposure to platinum group metals and diamonds, which is attractive in the near term and offers more compelling growth, Berenberg says. The bank says it sees Anglo American as a defensive pick versus Rio Tinto and BHP, but that it prefers Rio Tinto over BHP in the near term on dividend upside. Berenberg initiates Anglo American with a buy recommendation and target price of 2,000 pence, while Rio Tinto and BHP are both placed at hold, with target prices of 6,000 pence and 2,000 pence, respectively. (sabela.ojea@wsj.com; @sabelaojeaguix)

0532 ET - The Norwegian krone rises against the euro as oil prices jump on global economic recovery hopes and supply curbs by major producers. EUR/NOK falls 0.3% to a two-week low of 10.2911, according to FactSet. The rollout of vaccines has improved the global economic outlook while OPEC and its allies decided to maintain their supply-tightening policy Wednesday. "The Norwegian Krone typically trades as a function of oil prices and that suggests it should outperform as oil prices steadily rally as they fully price the re-opening of the global economy," Nordea Asset Management analyst Sebastien Galy says. Higher crude prices should also support other oil-related currencies, he says. USD/RUB falls 0.6% to 75.0622 and USD/CAD drops 0.3% to 1.2792. (renae.dyer@wsj.com)

0508 ET April Brent, as shown on the 30-minute chart, swung to a low of $58.04 yesterday before posting a swift rebound to a day-high of $59.12. Currently it has advanced further exceeding the high of yesterday. In fact, it has even shot over the upper Bollinger band, and the relative strength index is well directed in the 60s, keeping the intraday bias bullish. A further rally should push Brent toward $59.80 and $60.30 on the upside. Key support is located at $58.85 (around both the 50-period moving average and the lower Bollinger band). Only a return to this level would bring about a bearish reversal. April Brent is trading at $59.55 a barrel. [This piece contains the opinions of Trading Central and does not constitute personalized investment advice or form part of any invitation or inducement to buy or sell any security. The author has been prohibited by Trading Central from purchasing or otherwise directly or indirectly acquiring any direct or indirect beneficial ownership of any instruments or markets for which Trading Central or its affiliates issues recommendations. To read more, visit bit.ly/1MehCU9.] (analysts-europe@tradingcentral.com)

0503 ET - Base metals jump as investors' appetite for riskier assets returns amid hopes for the U.S. economy and stimulus measures. Three-month copper on the LME rises 1.3% to $7,912 a metric ton, aluminum gains 0.8% to $2,011 a ton and nickel rose 1.7% to $17,905 a ton. Global markets see riskier assets--such as stocks, oil and base metals--rising in tandem. "Risk appetite continued to surge in response to more vaccines being available in the U.S. and better-than-expected initial unemployment claims," says TD Securities. Investors are also hopeful that the Biden administration can pass another round of stimulus measures, providing extra support to the U.S. economy. (william.horner@wsj.com)

(END) Dow Jones Newswires

February 05, 2021 12:20 ET (17:20 GMT)

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