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Crude Slides on Surprise Build in U.S. Inventories


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Wednesday, May 15, 2019

SECTOR COMMENTARY

The energy sector is poised for a mixed to lower start, weighed down by weakness in the crude complex and in the major equity futures which fell on weak economic data out of China that fueled concerns about global growth and the trade negotiations. Sector news is light and the economic calendar thin which should keep trading levels in check.

WTI crude oil futures were off over 1% in early trading, trailing Brent, pressured by last night's API report showing a surprise build in U.S. crude inventories and rising concerns that the U.S.-Chinese trade dispute which could further threaten demand. The markets also digested this morning's IEA monthly report which highlighted the sharp declines in supplies from Iran and Venezuela but commented the world would require very little extra oil from OPEC this year due to the booming U.S. output. The agency also revised its forecast for growth in 2019 global oil demand 90,000 bpd lower to 1.3 million bpd and . The API data showed U.S. crude stockpiles rose 8.6mm barrels last week, compared with expectations of a 800k barrel draw that analysts expect the EIA report to show later this morning. Rising Middle East tensions capped losses.

Natural gas futures are flat this morning, driven by mostly unchanged forecasts calling for warmer than normal temperatures in the East and TX along with colder than normal temperatures in the West.

CANADIAN E&PS

Press Release - Surge Energy confirmed that a cash dividend to be paid on June 17, 2019 in respect of May 2019 production, for the shareholders of record on May 31, 2019 will be $0.008333 per share. The dividend is an eligible dividend for the purposes of the Income Tax Act (Canada).

OILFIELD SERVICES

Press Release - CGG reported the following 2019 first quarter unaudited results: IFRS figures: revenue at $271m, OPINC at $20m and net loss of $(30)m, including $(15)m loss from discontinued operations.

Press Release - KBR announced it has been awarded a Front End Engineering Design (FEED) contract by Oman LNG L.L.C for the debottlenecking of their facility at Sur in the Sultanate of Oman. Under the terms of the contract, KBR will provide FEED services for the debottlenecking project to increase production at its world-class plant in Sur. This FEED stipulates KBR performing full FEED services including licenser and vendor management and associated services.

(Late Tuesday) Press Release - Shawcor reported first quarter 2019 revenue of $350 million, a decrease of 1% from the $354 million reported in the fourth quarter of 2018 and in line with the $351 million reported in the first quarter of 2018. Net loss (attributable to shareholders of the Company) in the first quarter of 2019 was $9.1 million (or loss per share of $0.13 diluted) compared with net income of $4.4 million (or $0.06 earnings per share diluted) in the fourth quarter of 2018 and a net income of $3.8 million (or $0.05 earnings per share diluted) in the first quarter of 2018. Excluding the impact of the costs from the acquisition of ZCL Composites, new financing arrangements and the adjustment for Argentina Hyperinflationary accounting, Adjusted net income in the first quarter of 2019 was $3.2 million (or $0.05 adjusted earnings per share).

(Late Tuesday) Press Release - The Shawcor Board of Directors declared a dividend of fifteen cents (15.00 cents) per share on the outstanding common shares of the Corporation payable on the 7th day of June 2019, to shareholders of record at the close of business on the 24th day of May 2019.

REFINERS

(Late Tuesday) Reuters - CVR Energy sees 2019 total capex budget of $180 million to $200 million and 2019 turnaround spending planned at $40 million.

Credit Suisse upgraded PBF Energy to 'Outperform' from 'Neutral.'

MLPS & PIPELINES

(Late Tuesday) Press Release - Keyera reported adjusted earnings before interest, taxes, depreciation and amortization ("adjusted EBITDA") of $164 million in the first quarter of 2019 (Q1 2018 - $189 million), funds from operations1 of $129 million (Q1 2018 - $161 million), distributable cash flow1 of $108 million or $0.51 per share (Q1 2018 - $155 million or $0.75 per share) and ne t earnings of $34 million (Q1 2018 - $88 million).

(Late Tuesday) Press Release - SemCAMS Midstream ULC announced it has entered into an asset joint venture with Keyera to construct a natural gas liquids ("NGL") and condensate pipeline system to connect the liquids-rich Montney and Duvernay production areas of northwestern Alberta to the fractionation and condensate hubs in Fort Saskatchewan, Alberta. This pipeline system provides producers additional and alternative transportation solutions to meet growing production and is supported by long-term contracts with significant take-or-pay commitments.

(Late Tuesday) Press Release - Keyera announced a cash dividend for May 2019 of 15.00 cents per common share. The dividend will be payable on June 17, 2019, to shareholders of record on May 23, 2019. The ex-dividend date is May 22, 2019. This dividend is an eligible dividend for the purposes of the Income Tax Act (Canada). For non-resident shareholders, Keyera's dividends are subject to Canadian withholding tax.

MARKET COMMENTARY

U.S. stock futures were down, after weak Chinese economic data increased fears over declining global growth. European shares slipped on concerns over Italy's fiscal situation, while Asian shares ended up. Trade war fears continued to weigh on the euro. Oil prices fell after data showed a rise in U.S. crude inventories, while gold prices rose. Retail sales, industrial production, and manufacturing output data are on the calendar.

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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