Energy roundup: oil slips on Gulf recovery, Enerflex up 17% on data center deal

Carney designates west-coast oil pipeline a national-interest project

Oil futures traded in both directions on Thursday as Gulf crude exports showed signs of recovery while traders continued to weigh the risk of renewed U.S. military action against Iran. In early European trading, front-month Brent crude for December fell 1% to $101.26 a barrel and WTI futures slid 1.8% to $91.24 a barrel. By midday New York time, December Brent had reversed to trade up 1.8% at around $100 a barrel, with WTI up 0.2% at around $91, according to The Wall Street Journal. Naeem Aslam of Zaye Capital Markets said tight distillate markets and uncertainty around Middle East shipping continued to support prices, but evidence of stronger supply flows could quickly trigger profit-taking. Meanwhile, physical prices remained elevated as the market worried the U.S. might soon impose a ban on diesel exports.

The Wall Street Journal reported that the Pentagon is sending a third aircraft-carrier strike group and additional Marine Corps ships to the Middle East as President Trump considers renewing strikes on Iran after the midterm elections. Peter Cardillo of Spartan Capital Securities said supply concerns remained under scrutiny, with the conflict continuing to weigh on markets despite improved traffic through the Strait of Hormuz. The premium between Brent and WTI reflected the possibility of renewed attacks on oil infrastructure.

Enerflex shares surged as much as 17% after the company secured a 450-megawatt off-grid, natural gas-fired power generation contract for a North American data center developer. The company is committing $15 million in 2026 capital expenditure and authorizing $85 million for facility expansions in 2027 to improve its Engineered Systems capacity, according to the announcement. Chief Executive Paul Mahoney said the company has more than 2 gigawatts of opportunity pipeline to tap into and convert into “meaningful commercial awards.” In a TD Cowen report, analyst Aaron MacNeil estimated Enerflex is looking at roughly $1 million per megawatt of power for the contract, with revenue realized through 2027 and 2028 and incremental to TD Cowen’s forecast. “This single award is meaningfully above our existing assumption of $50 million/quarter of power-related ES [Engineered Systems] revenue,” MacNeil said. The deal reflects the strain energy bottlenecks have placed on digital infrastructure providers, who are seeking alternatives to local and regional grids.

In Canadian energy, Prime Minister Mark Carney designated a proposed new oil pipeline to the country’s west coast a project of national interest, forecasting it would create 140,000 jobs and generate more than C$20 billion in annual GDP. Opposition parties offered critical assessments. New Democratic Party leader Avi Lewis said the government was throwing billions in public money at a pipeline at a time of climate breakdown “while sweeping aside environmental protections.” Conservative lawmaker Michelle Rempel Garner said the pipeline represents another promise from Ottawa without a clear plan, adding her party will push for details on construction, the timeline, costs, and how and when Carney will ensure completion.

Separately, CIBC analysts said Canada may be on the cusp of a liquefied natural gas watershed moment, arguing that the new federal government has launched several domestic and international initiatives that have renewed focus on Canada’s LNG export potential. The analysts said the sanctioning of LNG Canada Phase 2 marks a potential turning point for the sector, where a more supportive policy environment, efforts to streamline approvals for major projects, and renewed engagement with international buyers set this cycle apart from those prior.

In Malaysia, Tenaga Nasional drew fresh analyst coverage. CIMB Securities analyst Choong Chen Foong said the utility’s renewable energy initiatives will likely strengthen its long-term growth outlook, supported by the Tasik Kenyir hybrid hydro floating solar project and the Sungai Perak hydro life extension program. The Kenyir project is expected to generate a high single-digit equity return based on a 21-year renewable energy supply agreement with DayOne, while the 5.8 billion ringgit Sungai Perak project will extend the hydro plant’s operating life by 40 years under a new power purchase agreement. While the projects are expected to have minimal impact on 2026–2028 core EPS, both look positive from an ESG perspective, he added. CIMB maintained a buy rating and a target price of 15.90 ringgit; shares were 0.6% higher at 12.98 ringgit.

Separately, Affin Hwang IB analyst Isaac Chow said Tenaga Nasional’s 12.7GW generation pipeline is expected to progressively rejuvenate its ageing power-generation fleet and strengthen generation earnings from 2028 onward. Strong electricity demand, driven increasingly by data centers, should support the company’s long-term growth, with Peninsular Malaysia’s peak demand projected to rise 48% to 33.5GW by 2035, Chow said. He flagged higher gearing, borrowing costs, and regulatory uncertainty as factors that could limit near-term upside, and said Tenaga Nasional’s absorption of 120 million ringgit to 150 million ringgit in fuel-adjustment charges should be treated as a one-off cost, though the precedent could weigh on sentiment. Affin Hwang maintained a hold rating with a target price of 12.50 ringgit; shares were 0.2% higher at 12.92 ringgit.

In Thailand, ttb wealth securities kept PTT Exploration & Production on a sell call, citing a still-structurally weak oil outlook due to recovering Middle East supply, OPEC+ spare capacity, and rising non-OPEC+ production. Analyst Yupapan Polpornprasert said volume growth at the company looks set to slow to 5% in 2027 and 6% in 2028, from 10% in 2026, under its current project pipeline. The brokerage raised the stock’s target price to 125.00 baht from 111.00 baht to partly reflect a valuation rollover. Shares were 1.4% higher at 146.50 baht.