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FERC's MOPR order could have huge ramifications; US coal remains in rough shape

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FERC order directing PJM to expand MOPR could have huge ramifications

After its members discussed a draft of the decision earlier in the day, the Federal Energy Regulatory Commission released a lengthy order late Dec. 19 directing the PJM Interconnection to revise its capacity market rules to address the price-suppressive effects of state-subsidized clean energy resources.

Big Q4 write-down could challenge Shell's debt reduction efforts

Anglo-Dutch major Royal Dutch Shell PLC's disclosure that fourth-quarter earnings could be negatively impacted by at least $500 million and that it will write down as much as $2.3 billion in the period could slow the company's efforts to cut debt and hike returns, analysts said.

Rating agencies clip Devon's credit score after Barnett sale, buyback expansion

While Wall Street analysts welcomed Devon Energy Corp.'s sale of its historic position in the Barnett Shale, the driller's move toward becoming an onshore shale oil producer drove two credit rating agencies to clip Devon's investment credit rating by a notch Dec. 20.

US coal sector remains in rough shape heading into 2020s after decade of decline

The U.S. coal sector is seeing little hope of improvement in the next few years, after a long list of bankruptcies, power plant closures, layoffs and other troubles marred the industry's timeline over the last decade.


"I think the probabilities of getting JEA done are more than 50%. It's not 100%, it's not 95%, it's not 75%," Guggenheim Securities LLC analyst Shahriar Pourreza said after Jacksonville, Fla., utility JEA, which is in the middle of considering whether to sell itself, fired its CEO.


* Pacific Gas and Electric Co. reached a settlement agreement with consumer advocacy groups in California, resolving all issues raised by the intervening parties in its pending general rate case that covers funding for the utility's efforts to prevent wildfires, reduce risks and improve safety.

* Creditors of the PG&E Corp. utility proposed new commitments to the wildfire victims, including payment of their full claim of $13.5 billion in cash upfront, compared to the debtors' plan of $5.4 billion cash upfront and partial compensation through share ownership in the reorganized company.

* Italian oil major Eni SpA is buying a minority stake in a U.S. solar photovoltaics portfolio from developer Falck Renewables SpA, and the two companies are forming a joint venture to develop 1,000 MW of new renewables capacity in the country by 2023.

* Morgan Stanley & Co. LLC forecast that about 70,000 MW to as much as 190,000 MW of coal-fired generation is "economically at risk" from the deployment of a "second wave of renewables" in the U.S. under three of the more likely scenarios in a recent analysis. The research firm said these projections exclude about 24,000 MW of coal generation already set to shut down.

* The U.S. Department of Energy decided not to amend the current standards for incandescent light bulbs, saying "the benefits of more stringent standards do not outweigh the cost to the American people." The move could increase U.S. energy costs by $14 billion, The Washington Post reported.

* Mexican state-owned Comisión Federal de Electricidad formulated a plan to consolidate state control of the electricity market, The Financial Times reported, citing a presentation of the plan's blueprint.

* President Donald Trump made remarks against wind power production, saying the technology "causes a large carbon footprint," The Hill in Washington, D.C., reported.

* China may be planning to open its power, telecommunications and oil sectors to private investments to diversify the industries from being state-centric, The Associated Press reported.

Natural gas

* Sempra Energy subsidiary Sempra LNG LLC announced that Cameron LNG has started producing liquefied natural gas from the second liquefaction train of its export facility in Hackberry, La.

* Dominion Energy Inc. completed the sale of a 25% noncontrolling equity stake in its Cove Point LNG facility in Maryland to Brookfield Asset Management Inc. affiliate Brookfield Super-Core Infrastructure Partners LP for about $2.1 billion.

* Russian energy giant PJSC Gazprom negotiated a deal with Ukrainian oil and gas company Naftogaz to settle legal disputes and continue Russian gas supplies to Europe, Bloomberg News reported.

* Swiss-Dutch shipment company Allseas Group SA suspended its shipping operations for the Nord Stream 2 pipeline in light of the sanctions imposed by the U.S. government, The Hill reported.


* A consortium operated by an Exxon Mobil Corp. subsidiary started oil production from the Liza field, located in the Stabroek Block in Guyana, ahead of schedule.

* Equinor ASA and Public Joint Stock Company Rosneft Oil Co. decided to move forward with developing the first stage of the North Komsomolskoye onshore oil and gas field in Western Siberia.

* Apache Corp. and Total SA formed a 50/50 joint venture to explore and develop the about 1.4 million-acre Block 58 off the coast of Suriname. Apache will explore the first three wells and then transfer the operatorship to Total.

* A federal judge in Montana allowed Native American tribes and other plaintiffs to proceed with a lawsuit against TC Energy Corp.'s Keystone XL oil pipeline from Canada, Bloomberg News.

* Petróleo Brasileiro SA - Petrobras started the binding phase for the sale of the Gabriel Passos refinery in the Brazilian state of Minas Gerais, along with its logistical assets.

* Analysts expect oil supplies to meet or exceed demand in 2020, despite OPEC production cuts and the initial U.S.-China trade deal, as Brazil and Norway step on the gas to tap the lucrative commodity and U.S. keeps steady outputs, The Wall Street Journal reported.

* Brooge Petroleum and Gas Investment Co. (BPGIC) PLC completed the acquisition of Twelve Seas Investment Co. in a reverse merger transaction.

* Denbury Resources Inc. agreed to sell nearly 50% of its working interest in four Southeast Texas oil fields to a Navitas Petroleum LP unit for $50 million in cash and a carried interest in 10 wells that Navitas will drill.


* The U.S. Environmental Protection Agency proposed to establish a new federal coal ash permitting program that could allow electric utilities to self-certify coal ash impoundments and landfills indefinitely without subjecting those facilities to outside review.

* Weakened U.S. coal demand, reduced seaborne pricing, and a wave of insurers and financial institutions announcing plans to exit the coal arena have been dominant themes in 2019.

* Hartford Financial Services Group Inc. will no longer insure or invest in companies that generate more than a quarter of their revenues from thermal coal mining or more than 25% of their energy production from coal.


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After holding firm the week before, the U.S. oil and natural gas rig count was up by 14 to a total of 813 rigs during the week ended Dec. 20, according to the latest Rotary Rig Count released by Baker Hughes Co.

New from RRA

* The performance of utilities was mixed compared to the broad market measures last week through midday Friday, with the Dow Jones Utility Average up 2.0%, while the S&P 500 and the Nasdaq Composite rose 1.7% and 2.2%, respectively. The week before, utilities had lagged the broad market.

* As the attention of the financial community starts to turn toward the upcoming new year, we glanced back at 2019 to see how the utility sector performed. Through the Dec. 13 close, the Dow Jones Utility index was up 20%, in fairly close proximity to the S&P 500, up 20%, and the Dow Jones Industrial Average, up 26%, but lagging the Nasdaq, up 31%.

The day ahead

* Early morning futures indicators pointed to a higher opening for the U.S. equity markets. To view more SNL equity market indexes, click here. To view more SNL Energy commodities prices, click here.

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Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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