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- 1 ONEOK’s acquisition deal may help in a stable cash flow.
- 2 The company shares closed at $63.72 on Friday.
Global oil and gas market is on one hand, a growing industry, while it is getting challenging for companies to cope-up with rising demand as well as increased need for the infrastructure. ONEOK (NYSE: OKE), a natural gas-focused organization, recently announced the acquisition of Magellan Midstream Partners (NYSE: MMP), a crude oil infrastructure provider, Reuters reported.
A ‘Transformational’ Deal
Currently, OKE stock was declining by over 6% in pre-market following the news. The natural gas company will be entering the oil and refined products market with the deal. Moreover, they will purchase Magellan for a 22% premium per share. The organization valuation will estimatingly reach $60 Billion after the transaction.
Pierce H. Norton II, the company CEO, described the deal as ‘transformational.’ Additionally, it will provide the organization with an over 25,000 mile oil and gas pipeline network across North Dakota and Texas, enabling a resilient infrastructure. This will add to a stable cash flow from operations.
According to the Financial Times, 2022 saw a number of prominent deals in the sector. Diamondback Energy (NASDAQ: FANG) and Marathon Oil (NYSE: MRO) bought land in the Permian and Eagle Ford Basins. Other transactions worth over $5 Billion were carried out over the course of the year. Although, companies might face legal intricacies considering strict regulatory policies.
ONEOK Stock Price Analysis
The share price saw a strong uptrend between October and December 2022 before falling into consolidation followed by a steep decline in March 2023. Interestingly, a couple of nuances are visible in November and March 2023 where ONEOK stock price rejected expected trends after quarterly earnings. While shares rose in the former month following negative returns, the latter month experienced a decline.
Fib retracements show value rising against a support of $62.50 with a possibility of a rebound near $64.20. Ease of movement (EOM) is neutral while true strength index (TSI) is below the signal line, highlighting a weakening trend. Furthermore, Aroon down is dominating Aroon Up with 57.14%, pointing towards a potential downtrend.
Global Oil And Gas Demands May Rise This Year
Angola, Africa’s biggest oil producer, produced 1.06 Million barrels last year according to Deutsche Bank, an investment banking company. The Central African nation is attracting global investments due to increasing oil prices. Natural resources finance UK head of the German Bank said that the market has apt resources to help attain net zero emissions.
Artificial intelligence (AI) and robotics have become among the driving factors of the energy market. This comes after the realization that flawless sector-related work is possible and increased security of oil workers. Companies including Chevron (NYSE: CVX), ExxonMobil (NYSE: XOM), Shell, British Petroleum (NYSE: BP), and more have raised their investments in technologies.
According to the Energy Information Administration (EIA), global oil inventories may grow by 0.3 b/d. Moreover, overall demand may rise by 2 mb/d as per International Energy Agency (IEA). Oil and gas are among the primary fuel sources while also supporting millions of jobs. However, the employment sector may see a negative impact as companies in the market may prefer robotics and AI instead of manpower.
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.
