Crude Climbs as Tropical Storms Head Toward Gulf of Mexico
SECTOR COMMENTARY
Energy stocks are set to open higher, aided by gains in the underlying commodities and U.S. stock index futures which are up ~1% in pre-market trading as technology gains and developments on coronavirus treatments are behind the bullish sentiment. Sector news is quiet while traders eye new developments on tropical storm Marco and Laura which are expected to make landfall this week.
Oil prices are positive in early trading, but off session highs, supported by gains in the broader index futures while the two tropical storms are set to make landfall in the Gulf of Mexico this week, shutting more than half of its oil production. Energy companies shut more than 1 million barrels per day of offshore crude oil production in the U.S. Gulf of Mexico because of the twin threat from Hurricane Marco and Tropical Storm Laura. Workers have been evacuated from more than 100 production platforms. "Prices are taking their cues from Mother Nature this morning as two storms bear down on the Gulf of Mexico. Half of the region’s production has been shut down, though gains will be limited by the threat of a second prolonged COVID wave," said Stephen Brennock of oil broker PVM.
Natural gas futures are up 2%, supported by gains in the oil markets while the two pending storms will likely disrupt LNG tanker loadings in the Gulf region. The September contract expires on Thursday.
U.S. INTEGRATEDS
Press Release - Noble Energy announced that the Special Meeting of Shareholders to approve the pending combination with Chevron is scheduled to take place on Friday, October 2, 2020 at 10:00 am Central time. The Record Date for Noble Energy shareholders entitled to vote at the Special Meeting is the close of business on Friday, August 21, 2020.
Reuters - Storebrand, Norway's largest private asset manager, has divested fromExxonMobil, Chevron, Rio Tinto and BASF citing their lobbying practices regarding climate. The stakes were small compared to Storebrand's $91 billion in assets under management but their sale marks an escalation
(Late Friday) Reuters - Exxon Mobil is limiting output at its flagship offshore project in Guyana to 100,000 barrels-per-day (bpd) due to more issues with the reinjection of natural gas.
INTERNATIONAL INTEGRATEDS
(Late Friday) Reuters - Petrobras said it has agreed to sell its entire stake in eight onshore fields at Polo Rio Ventura in the state of Bahia to 3R Petroleum e Participacoes for $94.2 million. According to a securities filing, $3.8 million was paid on Friday, $31.2 million will be paid when the transaction is closed, with $16 million coming 30 months after the deal and a further $43.2 million in contingent payments.
(Late Friday) Reuters - Petrobras has begun the process to sell its entire stake in five onshore fields at Polo Norte Capixaba, in the state of Espirito Santo, it said in a securities filing on Friday. According to the filing, average daily production in the first half of this year at the five fields, which Petrobras fully own, was 7,000 barrels of oil and 66,000 cubic meters of gas.
(Late Friday) Reuters - Brazilian prosecutors pressed charges on Friday against two people for an alleged scheme to obtain confidential market information from Petrobras to benefit A.P. Moller-Maersk.
Reuters - Royal Dutch Shell began shutting offshore production in the U.S.-regulated Gulf of Mexico ahead of tropical storms Laura and Marco. Shell is shutting down production for most of its offshore assets as it evacuates workers from platforms.
Reuters - Saudi Aramco said on Sunday it was setting up a new corporate development organisation to oversee the company's assets and secure greater access to growth markets and technologies. The new organisation, which will be led by Senior Vice President Abdulaziz al-Gudaimi and start operating on Sept. 13, will "support rapid and effective decision-making on the portfolio and corporate development activities," Aramco, the world’s top oil producing company, said in a statement.
U.S. E&PS
Press Release - Noble Energy announced that the Special Meeting of Shareholders to approve the pending combination with Chevron is scheduled to take place on Friday, October 2, 2020 at 10:00 am Central time. The Record Date for Noble Energy shareholders entitled to vote at the Special Meeting is the close of business on Friday, August 21, 2020.
OILFIELD SERVICES
Press Release - KBR has been awarded two contracts by Ningxia Baofeng Energy Group Co. Ltd (Baofeng Energy) for its 500KTA coal to olefins project & 500KTA C2-C5 comprehensive utilization project to be built in Ningdong Town, Lingwu City, Ningxia, China.
DRILLERS
Press Release - Transocean Ltd. announced that Transocean Inc., its wholly-owned subsidiary, has amended its previously announced exchange offers to exchange certain existing notes for up to an aggregate principal amount of $750 million of new notes issued by Transocean Inc., and terminated the related solicitation of consents.
MARKET COMMENTARY
U.S. stock index futures and global shares rose as the U.S. Food and Drug Administration's approval for emergency use of antibody-rich blood plasma on COVID-19 patients lifted treatment hopes and spurred bets of a quicker economic recovery. Gold rebounded as the dollar dipped. Storms bearing down on the Gulf of Mexico, shutting over half its oil production, lifted crude oil prices.
NASDAQ ENERGY TEAM THOUGHT LEADERSHIP
- 1/8/20 – CNBC’s Squawk Alley: Oil market reaction to US-Iran tensions
- 1/8/20 – Bloomberg Day Break – Steady escalation of US-Iran tensions
- 12/5/19 – Bloomberg Balance of Power – OPEC's Limited Efficacy
- 9/17/19 - Oil's New Risk Premium Discussion on CNBC TV
- 9/16/19 - Discussion on Bloomberg TV about Impact of Abqaiq Attack
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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