PDCE PDC Energy Inc

MARKET MOVEMENTS:

--Brent crude weakened 0.3% to $83.50 a barrel.

--European benchmark natural gas fell 8.6% to EUR26.00 a megawatt-hour.

--Gold futures rose 0.6% to $1,956.40 a troy ounce.

--LME three-month copper futures added 0.9% to $8,628 a metric ton.

--Wheat futures fell 1.4% to $7.03 a bushel.

TOP STORY:

Great Power Rivalry Looms Over Ukraine Grain Deal

Russia's decision to pull out of a deal allowing Ukrainian grain to be exported globally is a high-stakes gamble by President Vladimir Putin that risks diplomatic tensions with two of his country's most influential partners, China and Turkey.

Russia's move to choke off Ukraine's massive grain exports will further cripple its adversary's economy and could boost Russia's own grain export revenue by sending global grain prices higher. But it comes with a major cost by putting economic pressure on China, the largest recipient of Ukraine grain under the deal, and straining relations with Turkey, another major buyer that helped broker the original agreement between Russia and Ukraine last year.

Russia's moves are part of a renewed attempt by Putin to play diplomatic hardball with both adversaries and partners as the war in Ukraine drags on. In addition to backing out of the deal, Russia launched a wave of missile strikes on Ukraine's Black Sea ports and grain export infrastructure and threatened to attack civilian ships in the waterway, heightening tensions around the sea's strategic shipping lanes. Russia moved a warship into a shipping corridor in the southern Black Sea this week, the British Defense Ministry said.

Putin has ignored requests by Turkish President Recep Tayyip Erdogan to negotiate a return to the pact, according to diplomats and analysts. Erdogan said repeatedly in recent weeks that he planned to speak with Putin to resurrect the deal, but so far the phone call hasn't taken place, diplomats say. Turkish officials have continued to press the issue through various other channels into the Kremlin, they said.

OTHER STORIES:

Exxon and Chevron Stalk More Shale Deals as Profits Dip

Exxon Mobil and Chevron collectively banked nearly $14 billion in second-quarter profits Friday, down from last year's record-breaking levels but adding to their war chests as they eye acquisitions in the oil patch.

Exxon said it earned $7.9 billion in the second quarter, extending its run of strong quarters though its profit was down from the company's $17.9 billion haul in the same time last year, when Russia's invasion of Ukraine skyrocketed energy prices. Chevron said it collected $6 billion in profit, dropping from a quarterly record of $11.6 billion in the same period last year.

The profits follow multibillion-dollar deals by both companies in recent months, and the oil giants have said they aren't done shopping.

MARKET TALKS:

Europe's Natural Gas Stores Refilling at Rapid Pace

1119 GMT - European natural gas stores, a key concern ahead of last winter, are likely to be 93% full by late August, predicts Joel Hancock, energy analyst at Natixis in a note. Continent-wide stores are around 84% full so far, according to data from Europe's association of natural gas infrastructure operators, and the current rate of refilling, helped by imports of liquefied natural gas, should see stores hit 93% in around a month, Hancock says. Having strong stores by late August is key because Norwegian facilities will begin maintenance around that time, reducing an important supply of natural gas. Gas prices will likely rise as winter begins, but whether winter is colder or warmer than typical will be a crucial factor in how far it lifts, he adds. (william.horner@wsj.com)

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Chevron Sees $6.3B PDC Energy Deal Closing Next Month

0651 ET - Chevron expects its $6.3B to buy shale driller PDC Energy to close in August, ahead of the year-end deadline the oil company provided when it announced the deal in May. Chevron says in its 2Q earnings release that it "plans to further increase its investments in the United States with the" deal to buy PDC Energy. The deal boosts Chevron's position in its major US onshore play, the Permian Basin of West Texas and New Mexico, the most prolific American oil patch but one where Chevron and other companies have seen well-productivity issues over the past year. Chevron shares fall 2.1% in pre-market trading. (will.feuer@wsj.com; @WillFOIA)

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Ample Storage, Weak Industrial Demand Keep European Natural Gas Prices Down

1041 GMT - Weak European industrial demand for natural gas has countered the impact of hot weather on the continent's gas prices, says Energy Aspects. A climb in benchmark European gas prices has already unwound in recent days, falling a further 7.9% Friday to EUR26.20 a megawatt-hour. Europe's sluggish economy has inadvertently helped to keep gas prices low, as industrial demand for gas has been weak at a time when heatwaves are boosting demand for electricity to power air conditioners, the consultancy says. What's more, still ample gas storages which are being refilled ahead of winter at a rapid pace suggest little chance that prices will rise significantly any time soon, EA says in a note. (william.horner@wsj.com)

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Palm Oil Ends Lower Amid Continued Soybean Oil Weakness

1032 GMT - Palm oil prices ended lower in Asian trading, remaining under a range-bound pattern for the week. The losses followed continued weakness in soybean oil futures overnight on the Chicago Board of Trade, as worries about excess supply emerged amid a better weather and harvest outlook in the U.S., analysts say. The two edible oils typically trade in tandem as they are used in similar products. But analysts also point to several positive factors for palm oil futures, including potential supply disruptions from the looming El Nino, as well as geopolitical risks from the Russia-Ukraine war. The Bursa Malaysia Derivatives contract for October delivery fell MYR23 to MYR4,003 a ton. (yifan.wang@wsj.com)

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Copper Set for Weekly Rise on China Stimulus Hopes

0752 GMT - Copper edges higher and is on course for a weekly gain as expectations of Chinese stimulus have overcome fears about the nation's demand. Three-month copper on the LME is up 0.7% at $8,612 a ton and set for a 2.1% weekly rise. "Industrial metals continue to face headwinds from weak activity in Mainland China," says BMI in a note. "Nevertheless, prices have jumped in recent weeks on account of expectations of a stimulus announcement from the Mainland Chinese government." Beijing has hinted that it is planning stimulus measures to support China's property developers, potentially boosting home building and with it copper demand. (william.horner@wsj.com)

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Oil Price Edges Higher as US Economy Looks Resilient

0750 GMT - Oil prices are on course for a fifth consecutive weekly increase. Brent crude oil adds 0.1% to $83.83 a barrel. WTI also adds 0.1% to $80.16 a barrel. The two crude varieties are on course for around 3% and 4% weekly gains respectively. WTI settled above $80 a barrel Thursday for the first time since April. Strong U.S. economic data Thursday was the latest factor giving oil prices a boost. U.S. GDP figures were stronger than expected while a measure of inflation showed continued price pressure softening. "Crude oil gained as strong economic data improved the outlook for demand," says Australian bank ANZ in a note. "This strengthened the case for a soft landing following the aggressive rate hike cycle by the Fed." (william.horner@wsj.com)

Write to Barcelona Editors at barcelonaeditors@dowjones.com

(END) Dow Jones Newswires

July 28, 2023 08:00 ET (12:00 GMT)

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