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Wednesday's Energy Stocks: Electric utilities outpace sector, midstream retreats

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Wednesday's Energy Stocks: Electric utilities outpace sector, midstream retreats

Electric utilities outpaced other energy components on Wednesday, March 14, while midstream and coal shares followed broader markets into the red territory. The Dow Jones Industrial Average lost 1.00% to close the day at 24,758.12, while the S&P 500 retreated 0.57% to settle at 2,749.48.

In a March 13 report, Moody's brightened its crude oil price outlook through 2019, citing a tightening in global oil supply amid strong demand and restraint from OPEC. The rating agency raised its forecast price for West Texas Intermediate and Brent crude oil to a band of $45.00 per barrel to $65.00/bbl, up from a range of $40.00/bbl to $60.00/bbl previously.

A trading day after the release of the report, NYMEX Light Sweet crude increased 0.41% to $60.96/bbl, and NYMEX Brent crude edged up 0.39% to $64.89/bbl.

Among oil and gas behemoths, Exxon Mobil Corp. closed down 1.25% in above-average trading to $73.60, while Chevron Corp. retreated 1.14% on weak volume to $115.13. The companies' stock prices took a hit in recent weeks but Chevron's announcement of a buyback program has helped it recover, while shares of Exxon, which has remained mum so far on a stock repurchasing plan, continue to struggle.

CNX Resources Corporation shares tumbled 4.37% in robust trading to end at $15.54. Analysts were wary of the company's capital expenditure increase due to its plans to drill the Utica and Marcellus Shales in southwest Pennsylvania using jumbo 20-well pads.

Among top gainers in the electric utility sector, Edison International rose 2.82% on brisk volume to close at $63.81, NextEra Energy Inc. saw an increase of 2.16% in active trading to finish at $158.01, and El Paso Electric Co. added 1.14% in light trading to settle at $48.90.

Southern Co. shares advanced 1.06% on light volume to finish at $44.05, after S&P Global Ratings affirmed its A- issuer credit ratings and all issue ratings on the company and some of its subsidiaries. The rating agency also raised Mississippi Power Co.'s long-term issuer credit rating to A- from BBB+ and stand-alone credit profile to bbb from bb+.

"We are upgrading [Mississippi Power] because it has resolved the operating and regulatory missteps surrounding the Kemper project," S&P Global Ratings said in a report.

The outlook for Southern Co. and its subsidiaries remains negative due to "thin financial cushion at the current ratings" and risks connected to the construction of Georgia Power's Vogtle 3 and 4 nuclear reactors.

In the midstream sector, Enterprise Products Partners LP shed 1.54% to $25.63, MPLX LP declined 1.84% to $34.71 and ONEOK Inc. receded 1.04% to $57.16, all on thin volume.

April natural gas futures were lower at midweek as market participants look beyond near-term cold to focus instead on the impending arrival of spring. The April contract traded on the New York Mercantile Exchange from $2.710/MMBtu to $2.798/MMBtu Wednesday and settled 5.5 cents lower at $2.731/MMBtu.

Market prices and index values are current as of the time of publication and are subject to change. This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.