Baker HughesBKR

Baker Hughes is expanding its partnership with Venture Global LNG to supply equipment for two large-scale natural gas projects. The deal includes gas compression systems for the Cloud Connector Pipeline and modular liquefaction units, which turn gas into liquid for transport, for the Plaquemines LNG facility expansion.

This win supports the company's shift toward being a technology provider for the gas industry rather than just a traditional oilfield service firm. These types of long-term equipment contracts help build the company's multi-billion dollar backlog, which provides more predictable income than the volatile business of drilling new wells.

Source: GlobeNewsWire

Baker Hughes reported that it has not seen higher interest rates slow down investment in major energy projects. The company noted that the rapid buildout of AI data centers is creating such high demand for electricity that developers are moving forward with natural gas and power generation projects regardless of the cost to borrow money. This is a useful sign for the business because it suggests that the need for reliable power is currently a stronger force than the drag of high rates. As long as big tech companies continue to spend on data centers, Baker Hughes should see steady demand for the turbines and gas equipment it sells to power them.

Source: CNBC

Oil prices climbed after Saudi Arabia shut down its East-West pipeline, a critical route used to move oil across the country and avoid the volatile Strait of Hormuz. The closure follows several attacks on Thursday, and a planned meeting to discuss safe shipping lanes in the region has been delayed.

For Baker Hughes, higher oil prices and regional instability generally lead to more spending by energy producers on the specialized equipment and services the company provides. While Baker Hughes has shifted its focus toward natural gas and technology, its traditional oilfield business still benefits when global supply disruptions make new production more valuable.

Source: Bloomberg Markets and Finance

Brent crude oil prices topped $105 a barrel on Thursday as ongoing tensions in the Middle East raised fears of a disruption to global supplies. This follows a steady climb in prices over the last week.

While Baker Hughes is shifting its focus toward natural gas and new energy technology, high oil prices generally encourage its customers to spend more on equipment and services. Sustained high prices make large-scale energy projects more profitable, which helps keep the company's multi-billion dollar order backlog growing.

Source: Bloomberg Markets and Finance

Global oil prices reached 100 dollars a barrel on Wednesday. While higher energy prices generally help the companies that Baker Hughes serves, the stock is less tied to daily price swings than it used to be because so much of its business now comes from long-term natural gas and technology contracts.

Source: Bloomberg Markets and Finance

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