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

1509 ET - U.S. natural gas futures give back early gains after the EIA's weekly inventory report shows a smaller-than-expected 223 Bcf reduction in underground storage for last week. "This was primarily driven by reduced space heating needs across all major sectors, but an uptick in domestic production also contributed," Andy Huenefeld of Pinebrook Energy Advisors says in a note. A much larger drawdown is expected for this week given the Arctic blast across much of the U.S., including snow along parts of the Gulf Coast. "With inventories falling at a rapid pace in January, the futures market is building in additional risk premium for February and beyond," Huenefeld adds. The Nymex front month contract settles down 0.4% at $3.945/mmBtu. (anthony.harrup@wsj.com)

1328 ET - Kinder Morgan Executive Chairman Richard Kinder believes this is the most exciting time to be in the midstream natural gas market he has seen in his decades-long experience in the business. "We believe that our investments as they come online will drive growth in Ebitda and earnings per share for years to come," Kinder says on a call with analysts. Overall, the company sees additional growth opportunities in natural gas between liquefied natural gas, exports to Mexico and power and industrial growth, and plans to expand its transportation and storage capabilities in support of the growing natural gas market. Shares fall 1.3% to $30.38. (sabela.ojea@wsj.com; @sabelaojeaguix)

1301 ET - Oil futures recover from a swoon after President Trump said he would ask Saudi Arabia and OPEC to lower crude prices, which would imply the producer group bringing back some withheld production. "I don't think they're going to be very accommodating," says Mizuho's Robert Yawger. OPEC would probably want to sit on its spare capacity to get prices higher before returning production, he says, although if Iranian and Russian barrels are taken off the market there would likely be a rally. "I think $80 in WTI and $85 for Brent would be the line in the sand where they start to contemplate adding barrels back to the global supply chain," Yawger adds. WTI is off 0.5% at $75.09 a barrel after dipping as low as $74.39. Brent is down 0.4% at $78.72 a barrel. (anthony.harrup@wsj.com)

1258 ET - Oil futures recover from a swoon after President Trump said he would ask Saudi Arabia and OPEC to lower crude prices, which would imply the producer group bringing back some withheld production. "I don't think they're going to be very accommodating," says Mizuho's Robert Yawger. OPEC would probably want to sit on its spare capacity to get prices higher before returning production, he says, although if Iranian and Russian barrels are taken off the market there would likely be a rally. "I think $80 in WTI and $85 for Brent would be the line in the sand where they start to contemplate adding barrels back to the global supply chain," Yawger adds. WTI is off 0.5% at $75.09 a barrel after dipping as low as $74.39. Brent is down 0.4% at $78.72 a barrel. (anthony.harrup@wsj.com)

1217 ET - Birchcliff Energy should benefit from structural change in the North American gas market, says National Bank of Canada's Dan Payne, who upgrades the stock rating to outperform from sector perform. He says that Birchcliff "holds one of the highest sensitivities to the evolving gas price landscape," while its operating leverage which resulted from a pivot toward reinvestment, has positioned it to maximize its value proposition over the long term. In particular, Payne says the new investments opportunistically capitalize on the inherent operating leverage of its excess infrastructure capacity that can be support long-term cash flow and associated value into an improving price environment. Shares rise 4.6% to C$6.09. (adriano.marchese@wsj.com)

1111 ET - President Donald Trump's nominee for Agriculture Secretary, Brooke Rollins, testified during her Senate confirmation hearing that her top priorities will be distributing disaster aid to farmers, expanding exports and stopping the spread of animal diseases. Rollins did not outline specifics for stopping the spread of avian influenza but said she plans to work with state leaders. Rollins expressed support for biofuels made from crops during her hearing and shrugged off concerns that Trump's proposed tariffs would have on farmers. "He [President Trump] knows these are the people that have been with him the longest." (patrick.thomas@wsj.com)

1108 ET - With the price of natural gas rising recently, Union Pacific could see a pricing win. The railroad's coal business has been struggling, with coal demand down and coal-related freight revenue dropping in 4Q--a trend the company expects to continue in 2025. But higher natural gas prices could help the railroad among its utility coal contracts, the company says on a call. Higher natural gas prices might increase demand for coal transportation, as utilities switch back to coal as a cheaper alternative, leading to more coal shipments. Still, natural gas is volatile, says executive VP Kenny Rocker. "I've gotten out of that game of trying to forecast what's going to happen" with it, he adds. (owen.tucker-smith@wsj.com)

1054 ET - At Union Pacific, it was a good quarter for grain--and the company doesn't see that trend ending any time soon. Transporting grain is a core part of the railroad's business, and executives say on a 4Q call that a strong harvest in 2024 is expected to propel growth in grain volume again for the coming year. Freight revenue from grain and grain products was up 8% in 4Q, as the company struggled to make money from another of its core businesses, coal and renewables, where freight revenue dropped 29%. (owen.tucker-smith@wsj.com)

1053 ET - Natural gas stored underground in the U.S. fell by 223 billion cubic feet last week to 2,892 Bcf, reducing surplus inventories over the five-year average to 21 Bcf from 77 Bcf the week before, the EIA reports. The withdrawal for the week ended Jan. 17 was larger than the 167 Bcf average withdrawal for the week, but smaller than the 251 Bcf estimate in a Wall Street Journal survey of analysts. Inventories were 57 Bcf lower than at this time last year. Nymex futures pull back below $4 in the wake of the report, and are up 0.1% at $3.965/mmBtu. (anthony.harrup@wsj.com)

1049 ET - A possible paradigm shift in U.S. economic policy under Trump casts a fog of uncertainty over Union Pacific's future. Chief Executive Jim Vena hopes tariffs are only a negotiating chip for the president, and noted on a 4Q fourth-quarter earnings call that "I don't think the consumers in the U.S. would love to have increases in prices." But Trump-era changes could also help Union Pacific, particularly if more lax regulators can fast-track a plethora of waivers the company has submitted over the years, which have been held up in the regulatory process. Shares rise 4%. (owen.tucker-smith@wsj.com)

1008 ET - Rising demand for electricity is fostering innovative approaches to power generation, according to ABI Research. "Agriculture, data center, construction, manufacturing and mining industries renewed their interest in novel energy approaches," Daniel Burge, a smart-energy analyst at the market-data provider, says in a report. He cites a so-called solar-grazing contract that clean-energy company Enel North America recently signed with vegetation management-services provider Texas Solar Sheep. It included using over 6,000 sheep to graze around solar panels in eight plants. He also mentions Microsoft's supply agreement with Constellation Energy--which will enable the nuclear-power operator to revive the Three Mile Island plant--and Star Catcher, a startup that plans to build an energy grid in space. (luis.garcia@wsj.com; @lhvgarcia)

0929 ET - Oil futures are slightly higher after a string of losses amid uncertainty about the impact of possible tariffs and sanctions under the Trump administration. The market is likely to turn its focus to U.S. inventory data for last week from the EIA. The API reported a 1 million barrel build in crude stocks, analysts note, and further increases in product inventories. Analysts in a Wall Street Journal survey expect a drawdown in crude stockpiles of 500,000 barrels. WTI is up 0.3% at $75.66 and Brent is 0.3% higher at $79.26 a barrel. (anthony.harrup@wsj.com)

(END) Dow Jones Newswires

January 23, 2025 15:09 ET (20:09 GMT)

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