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Sectors

Sector Update: Energy Stocks Advance Late Afternoon

Energy stocks were slightly higher late Friday afternoon, with the NYSE Energy Sector Index and the State Street Energy Select Sector SPDR ETF (XLE) each increasing 0.2%.The Philadelphia Oil Service Sector Index was adding 1.2%, and the Dow Jones US Utilities Index was up 0.6%.Front-month West Texas Intermediate crude oil fell 0.7% to $71.56 a barrel, and the global benchmark Brent crude contract decreased 0.2% to $76.12 a barrel. Henry Hub natural gas futures dropped 2.3% to $2.94 per 1 million BTU.In sector news, the International Energy Agency on Friday projected a smaller decline in global oil demand in 2026 amid signs of a rebound in consumption as crude flows improve. The agency now expects oil consumption to fall by 1 million barrels per day this year, compared with a 1.1 million-barrel drop forecast in June. That would mark the first annual contraction since 2020, CNBC reported.In corporate news, Sempra (SRE) said Thursday it appointed Justin Bird as chief financial officer and Karen Sedgwick as president and chief executive of Southern California Gas. The appointments will take effect when the company's planned sale of a 45% stake in Sempra Infrastructure to KKR (KKR) affiliates closes. Sempra expects the deal to close in Q3. Sempra shares were down 0.5%.BHP (BHP) is mulling the sale of a desalination plant in Chile, along with its electricity transmission assets, as it focuses on its core copper business, Bloomberg reported. The electricity transmission assets are expected to fetch about $1 billion to $1.3 billion, while the desalination plant could raise about $500 million to $700 million, the report said. BHP shares were up 2.4%.South Bow's (SOBO) subsidiaries South Bow USA and South Bow Infrastructure Operations have agreed to pay more than $26 million to settle allegations that the 2022 Keystone Pipeline rupture in Kansas violated the Clean Water Act, the Environmental Protection Agency, the Department of Justice and the State of Kansas said Friday. South Bow shares were down 0.8%.Plains All American Pipeline's (PAA) Q2 results are likely to be pressured by the company's recent sale of its Canadian natural gas liquids business, UBS Securities said Thursday in a report. Plains All American shares were fractionally higher.

$BHP$PAA$SOBO$SRE
Sectors

Sector Update: Energy Stocks Softer Friday Afternoon

Energy stocks were lower Friday afternoon, with the NYSE Energy Sector Index decreasing 0.2% and the State Street Energy Select Sector SPDR ETF (XLE) shedding 0.3%.The Philadelphia Oil Service Sector Index was adding 0.9%, and the Dow Jones US Utilities Index was up 0.3%.Crude oil prices fell as Washington said it remains committed to finding a diplomatic solution for Iran. Talks between the US and Iran over a permanent peace deal are continuing, Bloomberg reported, citing an American official, despite two days of clashes that threatened to shatter a ceasefire. The US is still committed to finding a diplomatic solution with Iran, the official told Bloomberg on Thursday. The official described the ongoing discussions as technical talks.Front-month West Texas Intermediate crude oil fell 1.1% to $71.32 a barrel, and the global benchmark Brent crude contract decreased 0.7% to $75.79 a barrel. Henry Hub natural gas futures dropped 2.6% to $2.93 per 1 million BTU.In sector news, the International Energy Agency on Friday projected a smaller decline in global oil demand in 2026 amid signs of a rebound in consumption as crude flows improve. The agency now expects oil consumption to fall by 1 million barrels per day this year, compared with a 1.1 million-barrel drop forecast in June. That would mark the first annual contraction since 2020, CNBC reported.In corporate news, South Bow's (SOBO) subsidiaries South Bow USA and South Bow Infrastructure Operations have agreed to pay more than $26 million to settle allegations that the 2022 Keystone Pipeline rupture in Kansas violated the Clean Water Act, the Environmental Protection Agency, the Department of Justice and the State of Kansas said Friday. South Bow shares were down 0.9%.Plains All American Pipeline's (PAA) Q2 results are likely to be pressured by the company's recent sale of its Canadian natural gas liquids business, UBS Securities said Thursday in a report. Plains All American shares were down 0.6%.Solaris Energy Infrastructure (SEI) will join the S&P SmallCap 600, replacing Catalyst Pharmaceuticals (CPRX), effective prior to the opening of trading next Wednesday, S&P Dow Jones Indices said. Solaris shares rose 5.9%.

$PAA$SEI$SOBO
Wire

Plains All American's Q2 Outlook Softens After Divestiture, UBS Says

Plains All American Pipeline's (PAA) Q2 results are likely to be pressured by the company's recent sale of its Canadian natural gas liquids (NGL) business, UBS Securities said Thursday in a report.UBS now expects about $40 million in NGL segment profit, down from $148 million in Q1, and $675 million in crude, up from $582 million. It lifted its Q2 EBITDA estimate to $715 million from $710 million, versus $730 million in Q1.Plains has several near- to medium-term growth drivers, including small organic projects that offer stronger returns than acquisitions, 2026 hedging and firmer crude prices that may help in 2027, and rising Permian Basin oil volumes as new gas pipelines start up in Q4, the report said.Plains' higher capital-spending plan reflects growth projects across its long-haul system and gathering operations in the Permian, as well as its Canadian gathering network, the report said.Q2 results are due Aug. 7.UBS maintained its buy rating on Plains stock with a $25 price target.Price: $22.67, Change: $-0.16, Percent Change: -0.70%

$PAA
Commodities

Strong Refining Margins, Falling Crude Stocks Boost Energy Outlook, UBS Says

US crude inventories dropped by 8.2 million barrels as refinery utilization climbed to 96.7%, reinforcing concerns over tightening fuel supplies, UBS said in a Wednesday note.The Department of Energy reported an 8.2 million-barrel crude draw, exceeding consensus expectations for a 4.6 million-barrel decline and aligning with the American Petroleum Institute estimate of an 8.33 million-barrel draw, UBS said.Gasoline inventories fell by 0.90 million barrels, compared with forecasts for a 1 million-barrel decline. Diesel inventories increased by 0.95 million barrels, versus expectations for a 500,000-barrel draw, according to UBS.Refiners increased utilization rates by 1.4 percentage points over the week to 96.7%. UBS said operators rarely sustain such levels for long, yet fuel inventories continue to tighten despite elevated processing rates.US fuel inventories continue to trail historical levels, with diesel stocks running 12.8% below the five-year average and 5.8% below year-ago levels. Gasoline inventories also remain tight, standing 6.3% below the five-year average and 6.9% lower than a year earlier, according to UBS.Inventory shortages persist across key regions. Diesel stocks in PADD 1 sit 21.6% below the five-year average, while PADD 5 inventories remain 16.7% below historical levels. Gasoline inventories also trail their five-year averages, with deficits ranging from 3.0% in PADD 1 to 10.3% in PADD 3, UBS said.Margins remain well above mid-cycle levels, supporting refinery profitability. In Q2 2026, Mid-Continent cracks averaged $28.58 per barrel versus $13.40/bbl in Q1 2026 and $14.63/bbl a year earlier, while West Coast cracks increased to $41.80/bbl from $24.65/bbl and $25.28/bbl, respectively, UBS added.Strong margin conditions also extended to other regions. North Atlantic cracks averaged $27.64/bbl in Q2 2026, up from $17.41/bbl in the previous quarter and $13.76/bbl a year earlier, while Gulf Coast cracks rose to $30.64/bbl from $18.36/bbl and $12.76/bbl, respectively.Driven by a growing project pipeline, Plains All American Pipeline (PAA) increased its 2026 growth capital spending forecast to $400 million to $450 million net to the partnership from roughly $350 million previously. The company still expects maintenance spending to remain around $185 million.Plains has moved forward with several high-return projects across its Permian long-haul, Permian gathering and Canadian gathering systems as stronger customer interest and improving oil market fundamentals support additional investment, UBS said.After touring Archer-Daniels-Midland's (ADM) Decatur facility, UBS highlighted strong agricultural services results and continued demand for soybean meal in domestic and export markets. Management also views organic expansion opportunities as more attractive than bolt-on acquisitions at present.Improving margins across refining, chemicals and renewable diesel operations could drive stronger earnings and cash flow for Phillips 66 (PSX) through 2026. The company could also accelerate debt reduction as profitability improves, UBS said.Price: $21.34, Change: $-0.24, Percent Change: -1.11%

$ADM$PAA$PSX
Mining & Metals

Update: Keyera Provides Business Update, 2026 Outlook Following Plains Asset Acquisition

(Adds analyst comment in paragraphs 11 and 12. Updates shares.)Keyera (KEY.TO) was last seen down 2.5% after the company on Monday provided a business update and multi-year growth outlook after the company closed its $5.15-billion acquisition of Plains All-American Pipeline's (PAA) Canadian natural-gas liquids assetsKeyera expects fee-based adjusted EBITDA per share to increase by about 35% or an approximate 16% compound annual growth rate from 2025 to 2027.The growth targets reflect the contributions from the Plains acquisition, realization of near-term synergies, 2026 fractionation capacity expansions, and continued filling of available capacity across the integrated system.Keyera is also targeting a 7% to 8% fee-based adjusted EBITDA per share CAGR from 2027 to 2029, supported by continued filling of available capacity, completion of major growth projects and further optimization of the combined platform.The outlook is supported by strong basin fundamentals, with oil, natural gas and NGL production across the Western Canadian Sedimentary Basin expected to continue growing as export-market access expands and global demand for Canadian energy products increases.Keyera has realized its initial $100 million annual run-rate near-term synergy target, with about $90 million in corporate cost savings already captured since the Plains transaction was announced in June 2025.As a result, Keyera now expects total near-term annual run-rate synergies to range from $120 million to $140 million, expected to be realized within the first 12 months after deal closing.With the addition of Plains Marketing business, Keyera's platform now includes frac-spread exposure, which represents another important source of liquids supply for the company's integrated system.Keyera expects its Marketing's realized margin to be between $360 to $390 million in 2026.Taking into account the partial-year contribution of Plains assets, 2026 growth capital spending is expected at $550 million to $625 million and maintenance capital at $240 million to $260 million.National Bank Financial reiterated its sector-perform rating on Keyera shares and its $56.00 price target following the update."Based on the upsized synergy expectations combined with incorporating the recently announced ACE Rail Terminal investment, we expect a bump to our valuation. Meanwhile, we view the company's pro forma 7-8% fee-based adj. EBITDA per share CAGR for 2027-2029 as providing further support for the stock," analyst Patrick Kenny wrote.Keyera shares were last seen down $1.47 to $57.54 on the Toronto Stock Exchange.Price: $57.76, Change: $-0.71, Percent Change: -1.21%

$KEY.TO$PAA
Research

Goldman Sachs Upgrades Plains All American Pipeline to Neutral From Sell, Raises Price Target to $24 From $18

Plains All American (PAA) has an average rating of overweight and mean price target of $23.71, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)

$PAA
Oil & Energy

Crude, NGL Firms See Firmer Q2 Outlook on Exports, Pricing Tailwinds, TPH Says

Midstream energy companies focusing on natural gas liquids and crude logistics are heading into Q2 on a constructive note, buoyed by robust volume growth, elevated commodity prices, and soaring exports, TPH Energy Research strategists said in a note on Wednesday.TPH Energy Research strategists said the observations were based on industry interactions at the Energy Infrastructure Council conference.AJ O'Donnell, analyst at TPH Energy, said a key driver for the optimistic outlook is the strengthening of liquefied petroleum gas and NGL export fundamentals.O'Donnell said midstream executives said rising engagement with global buyers, especially from Asia, who are increasingly prioritizing supply diversity and security.The soaring demand comes as the market grapples with the impact of prolonged shipping disruptions in the Strait of Hormuz, a critical global energy chokepoint. The urgent demand for alternative supply routes has shifted the industry's focus toward infrastructure expansions.TPH said while several new export dock projects are already scheduled to come online over the next few years, executives are focused on the "next wave" of capacity expansions and additional brownfield opportunities.Targa Resources (TRGP) is seeing significant optionality at its Galena Park asset, with potential expansions expected to deliver improving economics as fixed costs are spread across a larger throughput base.The energy firm noted that incremental expansions at the site would yield progressively stronger economics as fixed operational costs are distributed across a larger volume base.Optimism also extended into the crude logistics sector, where Plains All American Pipeline (PAA) is re-evaluating its strategic footprint.Following its recent divestiture of certain NGL assets, the energy firm's management is focusing heavily on organic growth opportunities across its extensive pipeline network connecting the Permian Basin to the US Gulf Coast.Meanwhile, US midstream infrastructure firms are witnessing a robust pipeline of natural gas and power-related projects alongside strengthening demand trends across North America.Kinder Morgan (KMI) is advancing its Gulf Coast Express expansion project, which is expected to come online this quarter, while also progressing its Tennessee Gas Pipeline expansion, originally sized at about 500 million cubic feet per day.Trident Energy also continues to scale its development portfolio, targeting 1.5 billion cubic feet per day of capacity in 2027 and a further 0.5 Bcf/d in 2028, with major contract awards expected to begin in late 2027.DT Midstream (DTM) reported rising Northeast US demand, with its management pointing to about 7.5 Bcf/d of largely utility-scale demand, and noting potential upside from emerging modular power requirements.TPH Energy strategists said the energy firm also highlighted the flexibility of its Midwest Incremental Supply Transportation project, which can source gas from both the Northeast and western supply basins via interconnected pipeline networks.Energy Transfer (ET) said it continues to see strong demand across its system, particularly in the Permian Basin and around Abilene, Texas, where it is positioning itself as a key provider of redundancy and integrated gas services.The company also noted uncertainty around uncontracted "behind-the-pipe" gas volumes, though such volumes remain contractually protected in the near term.On the gas distribution side, Kodiak Gas Services (KGS) plans to grow its base business by 3% to 4% while expanding its power build-out ambitions, citing a 2-gigawatt development pipeline, supported by equipment-sourcing capacity and continued inbound interest in additional megawatt-scale projects.Meanwhile, Cheniere Energy (LNG) continues to advance its Corpus Christi and Sabine Pass liquefaction expansions, Van Everen said, with sufficient commercial agreements in place to support much of the two-train development.Once completed, the projects are expected to add about 6 million metric tons per annum of LNG capacity, with the firm targeting long-term contracted levels near historical averages of about 90%.Elsewhere, Excelerate Energy (EE) pointed to project opportunities in Jamaica, Vietnam and India, as the company looks to deploy floating LNG infrastructure to support emerging gas import markets.Price: $33.66, Change: $-0.65, Percent Change: -1.89%

$DTM$EE$ET$KGS$KMI$LNG$PAA$TRGP
Research

Research Alert: CFRA Keeps Hold Opinion On Lp Units Of Plains All America

CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:Our 12-month target of $25 (up $4) reflects a combination of our relative valuation and DCF model analyses. On a relative basis, we apply an 11.0x multiple of enterprise value to 2027 EBITDA, in line with peers. That approach yields a value of $22 per unit. Our DCF model uses medium-term FCF growth of 4.0% per year, 2.0% terminal growth, discounted at a WACC of 7.7%, and yields a value of $28 per unit. We lift our 2026 earnings per unit estimate by $0.24 to $1.85 and 2027's by $0.23 to $1.98. PAA has technically closed on the sale of its Canadian NGL assets to Keyera Corp. for approximately CAD5.3 billion in cash despite a challenge by the Canadian Competition Bureau. Should the Bureau prevail in court, we think it could demand a post-sale remedy, which might include forcing Keyera to either unwind this recent transaction, or forcing a sale of some or all of the NGL assets to a third party. We continue to see crude oil logistics as PAA's core strategic business.

$PAA
Commodities

Keyera's Gathering, Processing Segment Reports Rise in Q1 Gross Throughput

Canadian energy infrastructure company Keyera on Thursday reported average Q1 gross processing throughput for its gathering and processing segment of 1.752 billion cubic feet per day, up from 1.59 bcf/d in the corresponding quarter last year.Net processing throughput for the segment for the quarter ended March 31 stood at 1.55 bcf/d, up from 1.44 bcf/d in the year-ago period.For its liquids infrastructure segment, the company reported gross processing throughput of 186,000 barrels per day, down from 196,000 b/d in the year-ago period.Net processing throughput for the liquids infrastructure segment was reported at 105,000 b/d, compared with 113,000 b/d in the same quarter last year.In Q1, the marketing segment reported sales volumes of 214,800 b/d, down from 220,800 b/d last year.The company said repairs have been completed at its Alberta EnviroFuels facility following an outage. The company is also completing a six-week turnaround at the plant, originally planned for fall this year.The facility is expected to return to full operating capacity by the end of this month.Keyera further said that it has successfully closed its acquisition of the Canadian natural gas liquids business from Plains All American Pipeline (PAA) and Plains GP (PAGP). The deal was valued at CA$5.15 billion ($3.77 billion) when disclosed in June last year, according to a statement from the sellers then.Price: $22.03, Change: $+0.14, Percent Change: +0.63%

$PAA$PAGP
Research

Research Alert: Paa: Slight Miss In Q1, Strategic Repositioning Almost Complete

CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:PAA posted Q1 adjusted earnings per unit of $0.39, missing consensus by $0.03, with adjusted EBITDA of $730M down 3% Y/Y. The Crude Oil segment generated adjusted EBITDA of $582M, up 4% Y/Y, driven by Permian volumes up 10.5%, while the NGL segment declined 23% to $145M due to lower frac spreads and reduced sales volumes. The mixed results highlight PAA's strategic repositioning toward crude oil focus through the pending Canadian NGL divestiture to Keyera. Management raised CY26 adjusted EBITDA guidance to approximately $2.88B, with the midpoint up $130M or 4.7%. We expect the Keyera deal, fetching ~$3.75B in cash and closing this month, will help address balance sheet concerns as pro forma leverage of 4.1x remains above PAA's target range of 3.25x-3.75x. The strategic repositioning should make PAA a more purely crude oil-focused midstream play while proceeds enable debt reduction from the current $11.6B net debt level.

$PAA
Mining & Metals

Update2: Keyera's Purchase of Plains All American's Natural Gas Liquids Assets Challenged by the Competition Bureau

(Adds Keyera comment on expected closes of the acquisition in paragraph 5; updates shares.)Keyera (KEY.TO) faces official pushback on its $5.15-billion acquisition of Plains All American Pipeline's (PAA) Canadian natural gas liquids assets as the Competition Bureau on Tuesday said it filed an application with the Competition Tribunal challenging the deal.The bureau said in a release it believes "the proposed transaction is likely to harm competition in natural gas liquids processing and storage, particularly at Fort Saskatchewan, Alberta, Canada's primary hub for these services".The bureau said the referral to the Tribunal follows on an investigation that concluded the acquisition would eliminate a close competitor in the Fort Saskatchewan market and increase market concentration. It also said the merged company would have the "ability to increase prices, impose less favourable contract terms, reduce incentives to expand capacity, and further entrench control over critical infrastructure".When it first announced the acquisition in July of last year, Keyera said the purchase would add natural-gas liquids fractionation and processing facilities, as well as 23-million barrel of oil storage, 1,500 miles of pipelines and terminal infrastructure in Western Canada and Ontario.In a statement, Keyera said it received a filing from the Competition Bureau shortly before markets opened on Tuesday It said the bureau's challenge does not prevent it from closing the acquisition. It expect to complete the purchase this month.."The Company disagrees with the Commissioner's assertions and characterization of the Transaction, and intends to respond to the application. As the Company has previously advised, the Transaction will strengthen competition across the basin and provide customers with improved access to key markets and greater flexibility in how their products are handled, transported and sold," it said.Keyera shares closed down $3.86 to $49.11 on the Toronto Stock Exchange.

$KEY.TO$PAA
Mining & Metals

Update: Keyera's Purchase of Plains All American's Natural Gas Liquids Assets Challenged by the Competition Bureau

(Adds comments from Keyera in paragraphs five and six; updates shares.)Keyera (KEY.TO) faces official pushback on its $5.15-billion acquisition of Plains All American Pipeline's (PAA) Canadian natural gas liquids assets as the Competition Bureau on Tuesday said it filed an application with the Competition Tribunal challenging the deal.The bureau said in a release it believes "the proposed transaction is likely to harm competition in natural gas liquids processing and storage, particularly at Fort Saskatchewan, Alberta, Canada's primary hub for these services".The bureau said the referral to the Tribunal follows on an investigation that concluded the acquisition would eliminate a close competitor in the Fort Saskatchewan market and increase market concentration. It also said the merged company would have the "ability to increase prices, impose less favourable contract terms, reduce incentives to expand capacity, and further entrench control over critical infrastructure".When it first announced the acquisition in July of last year, Keyera said the purchase would add natural-gas liquids fractionation and processing facilities, as well as 23-million barrel of oil storage, 1,500 miles of pipelines and terminal infrastructure in Western Canada and Ontario.In a statement, Keyera said it received a filing from the Competition Bureau shortly before markets opened on Tuesday It said the bureau's challenge does not prevent it from closing the acquisition and disagreed with the claims."The Company disagrees with the Commissioner's assertions and characterization of the Transaction, and intends to respond to the application. As the Company has previously advised, the Transaction will strengthen competition across the basin and provide customers with improved access to key markets and greater flexibility in how their products are handled, transported and sold," it said.Keyera shares were last seen down $2.17 to $50.80 on the Toronto Stock Exchange.Price: $50.76, Change: $-2.21, Percent Change: -4.17%

$KEY.TO$PAA
Mining & Metals

Keyera's Purchase of Plains All American's Natural Gas Liquids Assets Challenged by the Competition Bureau

Keyera (KEY.TO) faces official pushback on its $5.15-billion acquisition of Plains All American Pipeline's (PAA) Canadian natural gas liquids assets as the Competition Bureau on Tuesday said it filed an application with the Competition Tribunal challenging the deal.The bureau said in a release it believes "the proposed transaction is likely to harm competition in natural gas liquids processing and storage, particularly at Fort Saskatchewan, Alberta, Canada's primary hub for these services".The bureau said the referral to the Tribunal follows on an investigation that concluded the acquisition would eliminate a close competitor in the Fort Saskatchewan market and increase market concentration. It also said the merged company would have the "ability to increase prices, impose less favourable contract terms, reduce incentives to expand capacity, and further entrench control over critical infrastructure".When it first announced the acquisition in July of last year, Keyera said the purchase would add natural-gas liquids fractionation and processing facilities, as well as 23-million barrel of oil storage, 1,500 miles of pipelines and terminal infrastructure in Western Canada and Ontario.Keyera could not be immediately reached for comment.Keyera were last seen down $3.50 to $49.47 on the Toronto Stock Exchange.Price: $50.09, Change: $-2.88, Percent Change: -5.44%

$KEY.TO$PAA

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