Coal shares rallied and weathered the broader selloff on Monday, March 27, a day before President Donald Trump is expected to issue an executive order that will begin to roll back the U.S. EPA's Clean Power Plan.
Billed by the Trump administration as an executive order driven by the prospect of job creation and energy independence, the expected rollback of the CPP could prove a welcome respite from regulatory pressure many have blamed for a multiyear industry downturn.
Steering the sector to the positive side of the ledger, Foresight Energy LP spiked 6.96% in below-average trading to finish at $6.76, Arch Coal Inc. earned 4.60% on strong volume to close at $67.75 and Cloud Peak Energy Inc. rose 2.14% in light trading to settle at $4.30. The SNL Coal Index edged up 0.52% to close at 67.35.
Energy equities and broader markets opened the week in the red territory, as investors remain wary of Trump's ability to implement his agenda after the failure of the Republican healthcare bill. The Dow Jones Industrial Average sank 0.22% to settle at 20,550.98, the S&P 500 decreased 0.10% to finish at 2,341.59 and the SNL Energy Index fell 0.43% to close at 289.19.
In the midstream sector, megamergers and acquisitions dominated the sector headlines in 2016, but smaller-scale infrastructure deals appear poised to steal the M&A spotlight in 2017. Industry experts expect to see more simplifications, drop-downs and asset acquisitions in 2017, but of a different size.
"Our thought is that the small-scale is going to be the focus at least this year," Fitch Ratings' Senior Director Peter Molica told S&P Global Market Intelligence, noting that asset acquisitions will be the most prevalent. "I think 2017 is going to be a kind of transition year."
Notable performers for the day include Energy Transfer Equity LP, which declined 3.12% to end at $18.31 in heavy trading; Sunoco Logistics Partners LP, which rolled back 1.08% to settle at $23.75 in normal volume; and Magellan Midstream Partners LP, which gave up 1.19% to finish at $75.55 in light trading volume.
Vanguard Natural Resources LLC shed 6.10% on above-average volume to close at 20 cents. Its subsidiary Vanguard Operating LLC agreed to a stalking-horse bid from OXY USA Inc. of $78.3 million for oil and gas assets as part of its Chapter 11 proceedings. Vanguard registered plans to auction the acreage in Glasscock County, Texas, under bidding procedures allowing qualified bidders to submit better offers, according to a March 24 SEC filing. The auction will be held on or around May 2.
Among electric utilities, NextEra Energy Inc. dipped 1.28% in brisk trading to end the session at $131.10, AES Corp. slid 0.89% on thin volume to close at $11.13 and Exelon Corp. shrank 0.78% in below-average trading volume to finish at $35.84. The SNL Electric Company Index closed down 0.74% at 454.45.
April natural gas futures gave back early gains to settle on the negative side of the ledger in the week's opening session. The market is finding little to support gains ahead of options expiration at the close of business Tuesday, and the contract's roll off the board at Wednesday's close. Weather outlooks signal demand erosion, and the natural gas supply looks to end the withdrawal season at a healthy level.
Market prices and index values are current as of the time of publication and are subject to change.