Shares of offshore wind developer Orsted rose 15 per cent on Tuesday after the US administration revoked an order to halt work on a project by peer Equinor, easing concerns over the Danish company's US projects under development.
Late on Monday Equinor said the Trump administration had lifted a month-old stop-work order on its Empire Wind offshore wind project in New York, offering a reprieve for the Norwegian company and US offshore wind in general.
The share price of Equinor, which is mostly reliant on oil and gas, was up 1.5 per cent by 09:48 GMT, while Orsted's shares were up 15.1 per cent. Equinor holds a 10 per cent stake in Orsted.
"We see a positive read-across here for Orsted as the Empire Wind stop-work order significantly raised market concerns about permitting/cancellation risks around Orsted's under-construction portfolio," analysts at Jefferies said in a note.
These concerns were a key contributor to shaving 40 per cent or some $10 billion of Orsted's market value since the US election, they added.
Orsted is currently constructing the Revolution Wind and Sunrise Wind projects off Rhode Island and New York.
"The reversal of the stop order last night came as a big surprise and will likely result in very significant outperformance by Orsted today, exacerbated by the short positions on the stock at present," analysts at JPMorgan said.
While further surprises in US offshore wind could not be ruled out, the risk perception should clearly diminish now, although Orsted has plenty of other issues to grapple with, they added.
This includes the impact of tariffs on its US projects and cost concerns elsewhere, with the company recently suspending the development of its British Hornsea 4 project, JPMorgan said.
(Reporting by Nora Buli; Editing by Jan Harvey)