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Crude Falls as Traders Reduce Risk


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Tuesday, August 13, 2019

SECTOR COMMENTARY

Energy stocks are set for a lower open, tracking lower oil futures and weaker broader indices. Ratcheting trade restrictions and increasing forecasts of slower global growth from market economists continue to weigh on global risk sentiment. Earnings have now mostly completed, leaving sector direction to commodities and the macro backdrop.

Oil prices are off between a quarter and half a percent, trending lower as traders reduce risk and exposure to global cyclical instruments. Weak German economic sentiment indicators came in below consensus, which is the latest sign of slowing global commerce.

Natural gas futures are higher by just under 1% as electricity usage reaches peak summer levels.

U.S. INTEGRATEDS

Reuters - ExxonMobil is considering an exit from the British North Sea after more than 50 years in the oil and gas basin as it focuses on U.S. shale production and new projects. Exxon has held talks with a number of North Sea operators in recent weeks to gauge interest in some or all of its assets, which could fetch up to $2 billion, according to three industry sources with knowledge of the matter. Exxon declined to comment.

INTERNATIONAL INTEGRATEDS

(Late Monday) Reuters - BP may shut the small gasoline-producing unit at its 430,000 barrel-per-day (bpd) Whiting, Indiana, refinery in early September. The 65,000-bpd fluidic catalytic cracking unit 600 (FCCU 600) is scheduled for a planned overhaul, the sources said. The shutdown has been expected as early as mid-August.

(Late Monday) Reuters - Petroleo Brasileiro SA Petrobras said it had prepaid a 2.7 billion reais ($678 million) debt with its employees' pension fund Petros that was due in 2028. The company said the debt with Petros is related to hyperinflation losses the fund incurred in the 1980s. "The prepayment contributes to improve liquidity of the fund and is aligned with the company's liabilities management strategy".

(Late Monday) Reuters - Royal Dutch Shell is restarting the Gas Olefins Unit 1 (GO 1) at its Norco, Louisiana, chemical plant. Shell plans to begin restarting the 25,000 barrels per day (bpd) coker in the adjoining 225,300 bpd Norco refinery this week.

U.S. E&PS

JP Morgan resumed coverage of Occidental Petroleum at 'Underweight'.

DRILLERS

BTIG downgraded Seadrill to 'Neutral' from 'Buy.'

OILFIELD SERVICES

(Late Monday) Press Release - Superior Energy Services announced it has received written notice from the New York Stock Exchange that the Company is not in compliance with the NYSE continued listing standard set forth in Rule 802.01C of the NYSE Listed Company Manual, which requires the average closing price of the Company's common stock to be at least $1.00 per share over a period of 30 consecutive trading days.

(Late Monday) Press Release - Tidewater announced revenue for the three and six months ended June 30, 2019, of $125.9 million and $248.0 million, and net losses for the same periods of $16.0 million (or $0.42 per common share) and $37.7 million (or $1.01 per common share), respectively. Excluding certain costs outlined below, net losses for the three and six months ended June 30, 2019 were $15.5 million (or $0.41 per common share) and $33.5 million (or $0.90 per common share), respectively.

MLPS & PIPELINES

(Late Monday) Press Release - Trafigura Trading LLC and Buckeye Partners announced that Trafigura has received its first delivery of Permian crude oil from Plains All American's Cactus II pipeline at the Buckeye Texas Partners terminal in Corpus Christi, Texas. Trafigura and Buckeye have worked together to achieve early service commissioning and receipts, prior to full Cactus II operations, through connected infrastructure in the Eagle Ford basin. Further direct connections and interconnectivity, providing enhanced service capabilities, will be completed at Buckeye Texas Partners in Corpus Christi once the Cactus II pipeline is fully operational.

(Late Monday) Press Release - ONEOK announced that it has priced an offering to sell $2.0 billion of senior notes, consisting of $500 million of 5-year senior notes at a coupon of 2.75%, $750 million of 10-year senior notes at a coupon of 3.40% and $750 million of 30-year senior notes at a coupon of 4.45%.

JP Morgan downgraded Western Midstream Partners to 'Neutral' from 'Overweight.'

MARKET COMMENTARY

Major U.S. stock index futures were slightly lower, tracking global equities, as concerns over global trade war, protests in Hong Kong and collapse of the Argentine peso hurt investor sentiment. The Japanese yen remained near seven-month highs against the dollar, while gold prices were trading in the positive territory.

NASDAQ ENERGY TEAM THOUGHT LEADERSHIP

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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