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Energy Stocks Look To Continue Their Rally


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Monday, April 16, 2018

Sector Commentary

The energy sector is poised for a higher start this morning while U.S. stock futures trade in positive territory. The S&P 500 energy sector looks to continue its rally after last week's top performance, led by higher-beta drillers and small cap E&Ps. Early morning trading showed U.S. stock index futures rose as investors bet the weekend's U.S.-led missile attack on Syria would not escalate into a broader conflict.

Both WTI and Brent are lower by more than 1% in A.M. trading, pulling back after last week's 8.6% gain, the best weekly performance since July 2017. The primary focus is on the situation with Syria following the weekend attack by a joint U.S.-UK-France force on that country's chemical-weapons facilities, but concerns about a further escalation of tensions have been allayed. Last week, U.S. energy companies added oil rigs for a second week in a row, following through on plans to spend more on drilling this year with crude prices at three-year highs, energy services firm Baker Hughes said on Friday.

Natural gas are moving higher in early trade, marking one month highs, with forecast implying lower than normal temperatures in the Midwest and across the eastern half of the company.

U.S. INTEGRATEDS

(Sunday) Press Release - A flareup occurred at the Chevron refinery in Richmond but resulted in no evacuations.

(Saturday) Reuters - Chevron will proceed with the second stage of its giant Gorgon liquefied natural gas export plant off the northwest coast of Western Australia.

INTERNATIONAL INTEGRATEDS

Press Release - TechnipFMC has been awarded a front-end engineering design contract by BP for the floating production storage and offloading unit for the Tortue/Ahmeyim Field Development.

Reuters - Eni said output from Norway's Goliat field has resumed after being shut since Friday morning following a small fire.

Reuters - Gazprom said its natural gas exports outside ex-Soviet European countries and including Turkey totalled 62.2 billion cubic metres (bcm) between January 1 and April 15.

Press Release - Odfjell Drilling is pleased to announce that Statoil has awarded a conditional Letter of Intent for a drilling contract for Deepsea Atlantic for 6 firm wells with an estimated total duration of 18 months, scheduled to commence in early first quarter 2019.

U.S. E&PS

Piper Jaffray upgraded Occidental Petroleum to 'Overweight' from 'Neutral'.

Suntrust Robinson upgraded Pioneer Natural Resources to 'Buy' from 'Hold'.

CANADIAN E&PS

Press Release - Vermilion Energy is pleased to announce that we have entered into an arrangement agreement to acquire Spartan Energy, a publicly traded southeast Saskatchewan oil and gas producer, with annual production of approximately 23,000 boe/d. Total consideration for Spartan is approximately $1.40 billion, comprised of $1.23 billion in Vermilion shares plus the assumption of approximately $175 million in debt.

OIL SERVICES

Press Release - TechnipFMC has been awarded a front-end engineering design contract by BP for the floating production storage and offloading unit for the Tortue/Ahmeyim Field Development.

Press Release - National Oilwell Varco announced it expects to report first quarter 2018 revenues of $1.80 billion, which is below prior expectations. The revenue shortfall is primarily due to: Reduced progress on new offshore rig construction and customer-delayed deliveries of drilling, well servicing, and stimulation equipment, causing revenue to slip into later periods, and; Lower sequential shipments of subsea production equipment at quarter-end.

REFINERS

(Saturday) Press Release - SemGroup completed the sale of SemLogistics Milford Haven Ltd, an operator of oil storage facility and waste water treatment plant, located in Wales, UK, to Valero Logistics UK Ltd, a subsidiary of Valero Energy .

MARKET COMMENTARY

Stock futures pointed to a higher opening for Wall Street as investors hoped that there would be no immediate escalation in Syria following the weekend's U.S.-led missile strikes. European shares were lower, while its Asian counterpart closed on a mixed note. The dollar fell against a basket of major currencies. Oil dropped amid rising U.S. drilling activity. Gold prices edged down. Investors will be monitoring the March retail sales data and Netflix quarterly results, which are scheduled for release today.

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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