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Oil Slips as Short-Term Profit Taking Materializes


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Thursday, January 10, 2019

SECTOR COMMENTARY

Energy stocks are set to pause their recent ascent amid weaker equity futures and lower oil prices .  The S&P 500 Energy Index has risen five out of the first six trading sessions in 2019, and is up over 8% to start 2019.

News flow within the sector remained relegated largely to analyst ratings changes, with various recommendation revisions occurring across E&Ps, oilfield services and refiners this morning.

Oil prices were lower by roughly half a percent Thursday morning, as short-term profit taking materializes following the strong recent gains.

Natural gas futures are higher by nearly 3% ahead of weekly inventory data.  Analysts expect a draw of approximately 69 bcf.

US INTEGRATEDS

(Late Wednesday) - Reuters - Exxon Mobil 's 365,644 barrel-per-day (bpd) Beaumont, Texas, refinery restarted the small crude distillation unit (CDU) following a plant wide power outage. In addition to the 110,000 bpd Crude A CDU, Exxon was restarting the 16,000 bpd alkylation unit and the 45,000 bpd coker, the sources said.

INTERNATIONAL INTEGRATEDS

Reuters - Petroleo Brasileiro said in a securities filing it has started the process of leasing out two fertilizer plants in northeast Brazil. The company said it will start evaluating bidders interested in leasing the facilities as well as its fertilizer port terminals in the Port of Aratu, which have capacity to store and load 20,000 tonnes of ammonia and 30,000 tonnes of urea, the filing said.

Barclays downgraded Petroleo Brasileiro to 'Underweight' from 'Overweight'.

CANADIAN INTEGRATEDS

Canaccord Genuity downgraded Imperial Oil to 'Hold' from 'Buy'.

U.S. E&PS

(Late Wednesday) - Press Release - EP Energy announced that on January 3, 2019, EP Energy was notified by the New York Stock Exchange of its noncompliance with continued listing standards because the average closing price of its class A common stock over a prior 30 consecutive trading day period had fallen below $1.00 per share, which is the minimum average closing price per share required to maintain listing on the NYSE.

Barclays upgraded Hess to 'Overweight' from 'Equal Weight'.

CANADIAN E&PS

Canaccord Genuity downgraded Crescent Point Energy to 'Speculative Buy' from 'Buy'.

Canaccord Genuity downgraded Nuvista Energy to 'Hold' from 'Buy'.

Canaccord Genuity downgraded Pengrowth Energy to 'Sell' from 'Hold'.

Press Release - Seven Generations Energy 's Board of Directors has approved a 2019 capital investment budget of $1.25 billion that is expected to be funded from operations and that, given the current price environment, strikes a reasoned balance between current production and future growth projects.

OILFIELD SERVICES

Stephens initiated coverage of National Oilwell Varco at 'Overweight'.

Reuters - Petrofac secured engineering design services contract in Brunei. The deal will provide engineering across all phases of asset lifecycle for entire portfolio of onshore & offshore assets for BSP & BLNG.

Jefferies downgraded Superior Energy Services to 'Underperform' from 'Hold'.

(Late Wednesday) - Press Release - TechnipFMC announced that, on 9 January 2019, it filed with the U.S. Securities and Exchange Commission its Current Report on Form 8-K announced that the TechnipFMC Board of Directors advised that on January 8, 2019, Thierry Pilenko has decided to retire from the TechnipFMC Board of Directors, effective May 1, 2019, after the Company's Annual General Meeting. The Board of Directors also announced that Doug Pferdehirt, TechnipFMC CEO, will assume the role of Chairman of the Board, effective May 1, 2019. In addition, Pascal Colombani, current director, will be appointed to the role of Lead Independent Director, effective May 1, 2019.

BMO downgraded Weatherford International to 'Market Perform' from 'Outperform'.

DRILLERS

Press Release - Rowan Companies announced that the Rowan Norway, an N-Class ultra-harsh environment jack-up rig, has been awarded a contract in Norway by ConocoPhillips Skandinavia AS ("COPSAS") for an estimated duration of seven months that is expected to commence in the second quarter of 2019. The contract award is subject to partner approval. Following the initial contract term, COPSAS has two options. The first option has an estimated duration of five months and the second an estimated duration of nine months. The Rowan Norway is currently under contract with Turkish Petroleum in the Mediterranean Sea until approximately late April 2019.

(Late Wednesday) - Press Release - Ensign Energy Services and Trinidad Drilling announced that Trinidad has entered into an amalgamation agreement with Ensign Holdings, a wholly-owned subsidiary of Ensign, under which Trinidad will amalgamate with Holdings, with the amalgamated entity ("Amalco") becoming an wholly-owned subsidiary of Ensign (the "Amalgamation"). The Amalgamation, which is subject to the approval of the holders (the "Trinidad Shareholders") of common shares of Trinidad, will constitute the subsequent acquisition transaction proposed by Ensign in order to acquire all of the Trinidad Shares that Ensign did not acquire under its offer to purchase all of the outstanding Trinidad Shares, which expired on December 21, 2018.

REFINERS

Simmons initiated coverage of Marathon Petroleum, PBF and Valero Energy at 'Overweight'; and Delek and HollyFrontier at 'Neutral'.

MLPS & PIPELINES

Press Release - Enable Midstream Partners announced that Craig Harris has assumed the position of chief operating officer. The move, initially discussed on Enable's second quarter earnings call , was effective as of Jan. 1. It is one of several organizational changes, which include the addition of new leadership roles designed to further strengthen the company's position as a leader in the midstream sector.

(Late Wednesday) - Press Release - Inter Pipeline announced the declaration of a cash dividend of $0.1425 per share for January 2019. This dividend will be paid on or about February 15, 2019 to shareholders of record on January 22, 2019. This dividend is designated as an "eligible dividend" for Canadian tax purposes. Since inception, Inter Pipeline has distributed approximately $5.1 billion in cash payments to investors. Inter Pipeline's objective is to provide investors with sustainable monthly cash dividends, with dividend growth upside tied to the development of Inter Pipeline's portfolio of growth projects.

MARKET COMMENTARY

Stock futures for Wall Street's major indexes fell as no significant details emerged from the U.S.-China trade talks. European shares were lower as weak corporate results hit retailers and auto stocks. Asian equities ended in the red. The dollar recovered slightly, while gold prices were flat.

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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