Crude Climbs as Russia Signals Support for OPEC-led Supply Cuts

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Tuesday, June 11, 2019


Energy stocks are higher on momentum from the broader markets and from stronger oil prices .  Sector news is light.

Comments from Russia that it might support an extension of OPEC-led supply cuts boosted oil prices by about 1% in the US.  Inventory data later today is expected to show a modest draw in crude stocks of 1.2 million barrels while products are expected to rise.  Meanwhile, the EIA's short term energy outlook will be released today at noon.

Natural gas prices are higher for a third straight day of gains on value buying after prices plummeted to multi-year lows last week.


Press Release - SBM Offshore announced that it has signed a Letter of Intent (LOI) together with Petróleo Brasileiro for a 22.5 years lease and operate of FPSO Mero 2, to be deployed at the Mero field in the Santos Basin offshore Brazil, 180 kilometers offshore Rio de Janeiro. The Libra block, where the Mero field is located, is under Production Sharing Agreement to a Consortium comprised of Petrobras, as the Operator, with 40 percent, Shell with 20 percent, Total with 20 percent, CNODC with 10 percent and CNOOC Limited with 10 percent interest. The Consortium also has the participation of the state-owned company Pré-Sal Petróleo SA (PPSA) as manager of the Production Sharing Contract.

(Late Monday) Reuters - Petroleo Brasileiro said it has received 265 million reais ($68.20 million) related to a plea deal signed by Braskem to settle corruption charges. Braskem had previously returned 564 million reais to Petrobras, as the oil company is known, bringing the total the latter has recovered so far to around 828 million reais. The state-oil company added the total amount received as part of leniency deals triggered by corruption investigations within the 'Car Wash' operation has now surpassed 3.5 billion reais.

(Late Monday) Reuters - Petroleo Brasileiro has delayed the delivery of non-binding proposals for its LPG unit to June 11. Initially, Petrobras, as the company is known, had set the delivery date for non-binding proposals to acquire Liquigas Distribudora to June 6.

Reuters - Royal Dutch Shell shipped the long-awaited first cargo of liquefied natural gas from its massive Prelude floating LNG plant off northwest Australia, sealing the nation's position as the world's top exporter of the fuel.

Reuters - Total said it had launched the second phase of development for the Mero project off the coast of Brazil, along with its partners, as the giant oil project moves closer to getting off the ground. The Mero/Libra site is expected to start up by 2022, and could produce more than 600,000 barrels per day. Petrobras owns 40% of the Libra project, while Shell and Total each own 20%. Chinese state oil companies CNOOC Ltd and China National Petroleum Corp each hold 10 percent in the project.

Reuters - Total said it had started up the production of the Culzean field in the North Sea, adding that the Culzean project had been delivered ahead of schedule and below budget. Culzean will account for around 5% of the UK's gas consumption, bringing to 18% the proportion of the country's gas demand supplied by Total. Total has a 49.99% stake in Culzean, while BP has 32% and JX Nippon has 18%.

Reuters - Total reported bellows failed on process safety valve (PSV) at unit 805 causing leak at Port Arthur, Texas refinery. The leak stopped and the PSV was blocked in. The company also reported emissions from unit 805. The event started and ended on June 9.


(Late Monday) Press Release - Halcón Resources announced that its Board of Directors has appointed Richard Little Chief Executive Officer effective June 11, 2019. Mr. Little fills the CEO vacancy created in February. James Christmas will continue to serve as Non-Executive Chairman of the Board of Directors.


Press Release - Subsurface Imaging, part of CGG 's Geoscience division, has been awarded a contract by Equinor for the processing of seismic data from the Johan Sverdrup Permanent Reservoir Monitoring (PRM) system in the North Sea. Managed out of CGG's Oslo office and located inside Equinor's offices in Stavanger, a dedicated team of CGG processing experts, working together with Equinor, will deliver high-quality time-lapse 4D images to the Johan Sverdrup asset team within days of acquisition. By analyzing these 'snapshots' of the reservoir during production, Equinor geoscientists will be able to optimize production management and hydrocarbon recovery.

(Late Monday) Press Release - CES Energy Solutions announced the results of the matters to be voted on at the annual general and special meeting of shareholders held on June 10, 2019. In addition, CES announces that it will pay a cash dividend of $0.005 per common share on July 15, 2019 to the shareholders of record at the close of business on June 28, 2019.

(Late Monday) Press Release - Hi-Crush announced that the Board of Directors has approved a stock repurchase program of up to $25 million, effective immediately and authorized through June 30, 2020.

Press Release - Petrofac has secured its third project under a 10-year Framework Agreement with Petroleum Development Oman (PDO) with the award of a procurement services project for the Mabrouk North East Line Pipe Procurement Project in Oman. The contract, valued at approximately US$75 million, is the latest to be awarded under the agreement signed in 2017 to provide Engineering, Procurement and Construction Management (EPCM) Support Services for PDO's major oil and gas projects. The 19-month project scope includes management of line pipe material from sourcing, technical and commercial evaluation, planning and control services with management and co-ordination of interfaces with all parties involved.


Press Release - Nabors Industries announced, in connection with the tender offers by its wholly owned subsidiary, Nabors Industries, Inc., the accepted amounts of its previously announced two separate offers to purchase for cash up to an aggregate principal amount equal to $275.0 million (the "Maximum Aggregate Amount") of the outstanding series of notes, and in the case of the 4.625% Senior Notes due 2021, a maximum aggregate principal amount of $100.0 million (the "Sub-Cap").


(Late Monday) Press Release - Phillips 66 and Plains All American Pipeline announced that they have formed a 50/50 joint venture, Red Oak Pipeline LLC, and are proceeding with construction of the Red Oak Pipeline system (Red Oak). The pipeline system will provide crude oil transportation service from Cushing, Oklahoma, and the Permian Basin in West Texas to Corpus Christi, Ingleside, Houston and Beaumont, Texas.

(Late Monday) Press Release - Phillips 66 and Bridger Pipeline announced that they have formed a 50/50 joint venture, Liberty Pipeline LLC, and are proceeding with construction of the Liberty Pipeline (Liberty). The 24-inch pipeline will provide crude oil transportation service from the Rockies and Bakken production areas to Cushing, Oklahoma. From Cushing, shippers can access multiple Gulf Coast destinations, including Corpus Christi, Ingleside, and Houston, Texas.


Press Release - Cheniere Energy announced that its Board of Directors has appointed Michele A. Evans to serve as a member of the Board, effective June 7, 2019. Ms. Evans is considered an independent director and has been appointed to the Audit and the Governance and Nominating Committees.

BOFA Merrill upgraded MPLX to 'Buy' from 'Neutral.'

(Late Monday) Press Release - Phillips 66 and Plains All American Pipeline announced that they have formed a 50/50 joint venture, Red Oak Pipeline LLC, and are proceeding with construction of the Red Oak Pipeline system (Red Oak). The pipeline system will provide crude oil transportation service from Cushing, Oklahoma, and the Permian Basin in West Texas to Corpus Christi, Ingleside, Houston and Beaumont, Texas.

Credit Suisse downgraded Shell Midstream Partners to 'Underperform' from 'Neutral.'


Futures for Wall Street's major indexes gained as risk appetite held firm after the United States stepped back from imposing tariffs on Mexico. A surge in the Frankfurt stock market as German and Swiss investors returned from a one-day holiday drove European shares higher. Signs of more government stimulus in China supported Asian shares. The dollar steadied as investors focused on a Group of 20 summit later this month, where Beijing and Washington might make some progress on trade talks. Gold prices slid, while oil prices rose on expectations that OPEC and its allies would keep withholding supply. Data on producer prices is scheduled for release later in the day.


Nasdaq Advisory Services Energy Team is part of Nasdaq's Advisory Services -- the most experienced team in the industry. The team delivers unmatched shareholder analysis, a comprehensive view of trading and investor activity, and insights into how best to manage investor relations outreach efforts. For questions, please contact Tamar Essner . This communication and the content found by following any link herein are being provided to you by Corporate Solutions, a business of Nasdaq, Inc. and certain of its subsidiaries (collectively, "Nasdaq"), for informational purposes only. Nasdaq makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Sources include Reuters, TR IBES, WSJ, The Financial Times and proprietary Nasdaq research.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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