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Global Energy Roundup: Market Talk

2 Mar 2018 11:06 am

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

1104 GMT - Mining stocks are down following President Donald Trump's announcement of tariffs of 25% for steel imports and 10% for aluminum, but analysts at Liberum say these measures are unlikely to significantly impact iron-miner stocks. The brokerage says the U.S. isn't relevant to the iron-ore trade balance as most iron miners export to Asia. UBS says continued aggressive curtailment of steel production in China, designed to improve air quality, could see reduced demand for iron ore in the country. At 1104 GMT, shares in Anglo American are down 2.8% at 1,692.60 pence, Glencore shares are down 2.1% at 367.95 pence, and Rio Tinto shares are down 2% at 3,704.50 pence. (oliver.griffin@dowjones.com; @OliGGriffin)

1055 GMT - Bryan Garnier remains cautious on Suez, keeping estimates unchanged, excluding earnings per share, which it slightly lowers following a higher-than-expected tax rate from 2018 onward. The company is moving in the right direction with its efforts to restore market confidence, the brokerage says, but this still needs to be confirmed in the next quarters. Despite a share-upside potential of about 15%, BG maintains a neutral recommendation as it waits for management to address Suez's problems. Shares trade down 1.6% at EUR11.07. (marc.bisbalarias@dowjones.com; @bamarc)

1054 GMT - Plastic- and fiber-components supplier Essentra is now ready for a "sustained recovery", says Peel Hunt, as it raises its rating on the stock to buy. Peel Hunt says that despite a 22% fall in adjusted 2017 profit to GBP75.2 million, there is "nothing in the numbers to cause significant alarm", with the struggling health-and-personal care unit poised to bounce back in 2018. Peel Hunt raises its rating on the stock to buy from add, but lowers its target price to 550 pence from 585 pence. Shares are up 5.4% at 466 pence. (adam.clark@dowjones.com)

1015 GMT - Barclays says there was little in Petrofac's results that merited the stock's underperformance, suggesting that investors--discouraged by the company's previous actions--have pounced on any sign of weakness. Barclays accepts that Petrofac, which is under investigation by the Serious Fraud Office, is risky for many investors, but says that there is also significant upside potential. With Petrofac's performance beating expectations, Barclays upgrades its Ebitda forecasts for the 2018-19 period, but says forex movements could mitigate positive earnings. Barclays keeps its rating at overweight and price target at 600 pence. Shares are up 4% at 445.90 pence. (oliver.griffin@dowjones.com; @OliGGriffin)

0937 GMT - Jefferies says that Evraz's recent track record has assuaged the brokerage's past fears, which were founded on concerns that earnings would be hampered by cost inflation in Russia and slow margin performance in the U.S. Jefferies says that Evraz is currently in a position to benefit from its unique leverage on vanadium and coking coal, which are seeing rising prices due to Chinese demand and persistent supply constraints. Prices will normalize in time, but could stay higher for longer, Jefferies says. The brokerage raises its rating to hold, and its target price to 425 pence. Shares down 3%, or 13.30 pence, at 434.90 pence. (oliver.griffin@dowjones.com; @OliGGriffin)

0929 GMT [Dow Jones] May Brent, as shown on a 30-minute chart, continues to see a bearish bias following a decline of over 1% yesterday (March 1). Currently, though off a low of $63.19 a barrel seen yesterday, Brent is trading at levels below both the 20-period and 50-period MAs. The RSI remains below the neutrality level of 50. And downward momentum is further evidenced by the negative MACD, which has crossed below its signal line. Therefore, intraday bearishness is still in force, and Brent should proceed to reach $63.20 and $62.80 on the downside. The trailing key resistance has been lowered further to $64.50, breaching which would bring about a bullish reversal and call for a bounce toward $65.05 (around the high of yesterday). May Brent is trading at $63.76 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)

0757 GMT - While earnings surged 92% last year, Malaysian state oil company Petronas prefers to remain conservative on crude-price assumptions. CEO Wan Zulkiflee Wan Ariffin says the firm is predicting oil's 2018 average being below current levels ($64 for Brent) as he sees the market remaining volatile. That as Petronas is budgeting for $52 oil this year, he added. Nevertheless, Petronas plans a higher capital expenditure of around MYR55 billion this year, versus MYR44.5 billion last year. This could be a good news for local oil and gas services firms as jobs could be aplenty this year, if not, more than before. (yantoultra.ngui@wsj.com; @yantoultra)

0636 GMT - AmBank Research turns bullish on Malaysia's oil-and-gas sector as the 4Q earnings season points towards a bright outlook and on anticipation that crude stays above $60/barrel. The upgrade also comes despite state oil company Petronas' cautious capital-spending plans. As asset-utilization rates have begun to improve, AmBank expects a bottoming of charter rates even in the absence of any upward trajectory at this juncture. (yantoultra.ngui@wsj.com; @yantoultra)

0529 GMT - A recovery by Australian stocks the last 2 weeks was derailed by a 3rd day of regional declines, with the S&P/ASX 200 falling 1.2% this week. But that didn't even erase last week's gain while equities fell anew today on fresh overnight US selling--the latest round stoked by Trump's new steel and aluminum tariffs. The index dropped 0.7% today to 5928.9, similar to the past 2 days' declines. Resource stocks led this week's pullback in Australia as commodities prices retreated. Meanwhile, though financials also dropped for a 3rd day they managed a slight rise for the week. (robb.stewart@wsj.com; @RobbMStewart)

(END) Dow Jones Newswires

March 02, 2018 06:06 ET (11:06 GMT)

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