Crude Climbs as Supply Fears Outweigh Concerns over Further Interest Rate Hikes
The energy sector is poised for a higher start, supported by strength in the underlying commodities and in the broader markets. The major market indices edged higher ahead of the Federal Reserve policy meeting this week and on Q2 earnings which will allow investors to gauge the impact of a strong dollar and high inflation.
WTI and Brent crude oil are up in early trading as supply fears outweighed concerns over future aggressive rate hikes which would put a dent in demand. A weaker dollar combined with gains in the broader markets is also adding support to oil futures. European leaders are set to discuss a revised proposal where EU countries would cut gas use by 15% from August to March, in an effort to prepare for a winter of uncertain energy supplies. The European Union is expected to strike a deal on Tuesday. A repaired gas turbine will be installed in the Nord Stream 1 pipeline once it is returned after maintenance, and natural gas will then be supplied in "corresponding volumes", a Kremlin spokesman said on Monday. The Nord Stream 1 pipeline has only been operating at a 40% capacity since it resumed gas flows.
Natural gas futures rose this morning on forecasts for hotter weather and higher demand next week than previously expected.
BY SECTOR:
US INTEGRATEDS
No significant news.
INTERNATIONAL INTEGRATEDS
The Petroleum Safety Authority Norway (PSA) has given Equinor consent for the disposal of Heidrun loading buoy DSL1 at the Heidrun field.
Akastor ASA's 50% owned affiliate AKOFS Offshore AS has now signed a firm contract for its vessel "Aker Wayfarer" that will continue to perform services as a subsea equipment support vessel for Petrobras as client in Brazil. The duration of the contract is 1,415 days, or almost 4 years, and the services will commence in first half of 2023. AKOFS Offshore will be performing the "Aker Wayfarer" operations jointly with its partners Bravante for marine services and Oceaneering for ROV services. Total contract value is about USD 282 million, of which about USD 198 million will be revenue allocated to AKOFS Offshore and included in the company's backlog.
TotalEnergies, OML99 operator (40%) in partnership with the Nigerian National Petroleum Corporation (NNPC, 60%), announced the start of production from the Ikike field, in Nigeria. Located 20 kilometers off the coast, at a depth of about 20 meters, the Ikike platform is tied back to the existing Amenam offshore facilities through a 14 km multiphase pipeline. It will deliver peak production of 50,000 barrels of oil equivalent per day by the end of 2022.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
Scotiabank assumed coverage on Antero Resources with a Sector Perform rating.
Scotiabank resumed coverage on Chesapeake Energy with a Sector Perform rating.
Scotiabank assumed coverage on CNX Resources with a Sector Perform rating.
Scotiabank assumed coverage on EQT with a Sector Outperform rating.
Matador Resources announced that its Board of Directors declared a quarterly cash dividend of $0.10 per share of common stock payable on September 1, 2022 to shareholders of record as of August 17, 2022. In accordance with the Company’s amended dividend policy announced on June 10, 2022, this quarterly dividend of $0.10 per share is double the prior quarterly dividend of $0.05 per share.
Scotiabank assumed coverage on Range Resources with a Sector Perform rating.
Scotiabank assumed coverage on Southwestern Energy with a Sector Outperform rating.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
No significant news.
DRILLERS
No significant news.
REFINERS
No significant news.
MLPS & PIPELINES
TC Energy said that on July 23 that it had safely resumed normal operations of the keystone pipeline system.
MARKET COMMENTARY
Wall Street futures edged higher as markets braced for a Federal Reserve policy meeting during the week and a slew of earnings reports that would likely show the impact of a strong dollar and soaring inflation on corporate America. European shares rose, after earlier falling on weak German data. Japan's Nikkei snapped a seven-day winning streak to end lower. The U.S. dollar fell and major rivals gained as risk appetite returned to currency markets. Gold prices inched higher. Oil climbed as markets juggled Fed hike with supply fears.
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.
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