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Crude Surges on Reported Tanker Attacks Near Iran


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Thursday, June  13, 2019

SECTOR COMMENTARY

Energy stocks are set to open higher as oil prices surge following headlines of suspected attacks on two tankers off the coast of Iran.  WTI and Brent crude oil are both higher by more than 4%, trading around $53.30 and $62.45, respectively, and Europe's oil producers moved higher in the region's equity markets on the news.  This strength is expected to carry over into the U.S. equity markets.  Also catching headlines is Norway's government approving divestment of various oil and gas stocks from its equity portfolio.

The attacks overshadow OPEC's cut to its oil demand growth forecast as the group warned of potential further cuts as international trade disputes continue to mount.  The cartel said world oil demand will rise by 1.14 million bpd, 70,000 less than previously expected.

Meanwhile, natural gas futures are lower by two cents ahead of weekly inventory data, which is expected to show a build of 108 bcf.

INTERNATIONAL INTEGRATEDS

(Late Wednesday) Press Release - Eni and Synhelion, a spin-off of Zurich Polytechnic University (ETHZ), announced the development of a new technology for the production of methanol from carbon dioxide (CO2), water and methane, in a process that requires high temperatures achieved by harnessing solar energy.

(Late Wednesday) Press Release - Brazos Midstream announced it has executed gathering and processing agreements with Shell Exploration & Production, a subsidiary of Royal Dutch Shell , to construct a new natural gas gathering system located in the core of the Delaware Basin. Brazos' new midstream infrastructure is anchored by fifteen year, fee-based acreage dedications totaling 55,000 acres in Loving, Ward, and Winkler counties.

Reuters - Petroleo Brasileiro said it received final proposals for shallow water fields Polos Enchova and Pampo that surpass $1 billion in value. The transaction is still subject to internal approvals, the company said, adding the bids were received on June 5.

(Late Wednesday) Reuters - Petroleo Brasileiro said that its management approved a revision in scheduling of price adjustments for diesel and gasoline in its refineries. In a securities filing, the company said price adjustments will be made according to market conditions locally and abroad, instead of being made at fixed intervals. The revision will grant Petrobras flexibility, improving its competitiveness and efficiency.

(Late Wednesday) Reuters - Petroleo Brasileiro expects Brazil's Supreme Court to give its blessing to proposed governance rules for the sale of exploration and production (E&P) rights. Petrobras considers a favorable judgment in this case, along with the court's ruling last week that state-run firms do not need congressional approval to sell off their subsidiaries, as the legal pillars of its divestment plan to reduce its high level of debt, one of the highest in the sector.

CANADIAN INTEGRATEDS

(Late Wednesday) Press Release - Husky entered guilty pleas on federal and provincial charges related to a 2016 oil spill in Saskatchewan and will pay fines totaling $3.82 million.

U.S. E&PS

(Late Wednesday) Press Release - Antero Resources announced the appointment of Benjamin A. Hardesty as Lead Director. The Company also announced that Peter R. Kagan and James R. Levy have resigned from the board of directors of Antero Resources effective immediately. Mr. Kagan and Mr. Levy are both Partners at Warburg Pincus & Co. and their resignations follow the recent divestiture of Warburg Pincus' remaining interests in Antero Resources. These resignations have reduced the size of the Antero Resources Board to seven directors, five of whom are independent under the New York Stock Exchange's listing standards. Mr. Kagan will remain on the board of directors of Antero Midstream.

Press Release - Callon Petroleum announced that it closed on the previously announced divestiture of non-core assets in the southern Midland Basin to Sequitur Permian for net cash proceeds of $245 million, subject to customary post-closing adjustments. Net cash proceeds were adjusted for an effective date of January 1, 2019, and do not include potential contingent consideration payments of up to $60 million based on West Texas Intermediate average annual pricing over a three-year period.

Atlantic Equities downgraded Marathon Oil to 'Neutral' from 'Overweight.'

MKM Partners started coverage of WPX Energy at 'Buy.'

OILFIELD SERVICES

Press Release - KBR announced it has been awarded a $200 million contract by NASA to provide launch range operations support at the agency's Wallops Flight Facility in Wallops Island, Virginia. This is a new contract award for KBR.

Press Release - McDermott International announced that it has been awarded a sizeable technology contract by Ningbo Union King Polyester Material Limited for the technology license, process design engineering, and operator training services for a large-scale, grassroots 1,600 KTA paraxylene (pX) plant at Ningbo Union King's petrochemicals facility in Ningbo, China. Lummus Technology is the exclusive licensor of BP's pX technology, which offers pX production at purities of 99.8 percent with lower energy consumption and lower capital costs compared to more traditional pX technologies.

DRILLERS

Tudor Pickering Holt upgraded Diamond Offshore to 'Buy' from 'Hold.'

MLPS & PIPELINES

(Late Wednesday) Press Release - Keyera announced a cash dividend for June 2019 of 15.00 cents per common share. The dividend will be payable on July 15, 2019, to shareholders of record on June 24, 2019. The ex-dividend date is June 21, 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

Futures were higher Thursday morning, lifted by gains in shares of energy and telecoms stocks. Higher crude prices also supported U.S. stock index futures. In Asia, Hong Kong's Hang Seng dropped sharply for a second day as public tensions continued about a bill which would allow extradition to China. Gold prices rose, supported by expectations of an interest rate cut by the U.S. Federal Reserve, which also weighed on the dollar.

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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