Daily Brief Energy/Materials: Crude Oil, Commercial Metals Co, Riley Exploration Permian and more

• Russia has pledged to cut oil output to 9 million barrels per day by June, potentially causing Brent oil prices to rise to $90 in April and above $100 in the future
• The US has the option to release up to 60 million barrels of crude oil from the Strategic Petroleum Reserve to mitigate the impact of high oil prices
• SPR inventories currently cover 188 days of net import demand for crude oil, suggesting that the reserve may not need to be as large as it once was and could be used for funding infrastructure and federal spending priorities

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• Commercial Metals Company’s Q2’2024 earnings indicated a profitable yet relatively modest quarter.
• It reported net earnings of $85.8 million or $0.73 per diluted share on net sales of $1.8 billion.
• Excluding nonoperational items, adjusted earnings equated to $103.1 million or $0.88 per diluted share, with consolidated core EBITDA for the quarter representing $224.4 million.

• Riley’s asset base delivered 22% Y/Y organic growth in net operated oil production in FY23 from reinvesting about two-thirds of discretionary cash flow into the ground.
• Solid growth reflects the manageable capital intensity of the company’s conventional oil-producing assets in the Permian Basin.
• The midpoints of management’s FY24 capital and operating guidance imply that Riley expects to increase oil production ~10% Y/Y from a capital program that is ~10% lower than FY23.