Crude Climbs on Forecasts of Demand Rebound
SECTOR COMMENTARY:
The energy sector is set for a higher start, supported by strength in the crude complex. U.S. equity futures are trading near the flatline ahead of the Federal Reserve’s two day policy meeting, where the Fed is expected to raise interest rates by 50-basis points.
WTI and Brent crude oil are trading higher this morning on forecasts for a rebound in demand over the next year. The IEA and OPEC+ increased growth estimates and said it expects oil demand to grow by 2.25 million barrels per day over the next year. The news outweighed bearish API data which showed a 7.8-million-barrel crude build.
Natural gas futures are down as European forecasts turn less cold than previously expected.
BY SECTOR:
US INTEGRATEDS
No significant news.
INTERNATIONAL INTEGRATEDS
Eni, Euglena and Petroliam Nasional Berhad (PETRONAS) announced that they are jointly studying the possibility of developing and operating a biorefinery in the Pengerang Integrated Complex (PIC), one of the largest integrated refinery and petrochemical developments in Southeast Asia.
RBC downgraded Eni to Sector Perform from Outperform.
Repsol, BP and Cepsa confirmed that they were among oil companies being investigated by the Spanish antitrust watchdog in a preliminary investigation into possible anticompetitive practices in the energy industry.
On Monday, Shell made the difficult decision to pause an Expression of Interest (EOI) process, which had been in-market for more than a month, to supply an additional 50 petajoules of gas to domestic customers in 2023 and 2024. Shell was undertaking this process in compliance with the voluntary Heads of Agreement entered into with the Australian Government in September.
GRC (Green Revolution Cooling) announced that Shell Lubricants has joined GRC’s newly launched ElectroSafe Fluid Partner Program. By collaborating with Shell, GRC expands its capability to provide state-of-the-art liquid immersion cooling solutions to meet growing customer use cases and applications.
Kulara Water, the leading pure natural mineral water producer of Eau Kulen in Cambodia, has signed a long-term agreement with TotalEnergies ENEOS to provide a solar energy and energy storage solution for their new bottling facility located in Srayang Thaung Village, Srayang Commune, Kulen district, Preah Vihear Province, Cambodia.
Odfjell Drilling Ltd noted the announcement made by Northern Ocean Ltd, which states that the Company, on behalf of NOL, has agreed with TotalEnergies a multi-country drilling contract for the Deepsea Mira outside the Norwegian Continental Shelf.
CANADIAN INTEGRATEDS
Imperial Oil announced that it has taken up and paid for 20,689,655 common shares at a price of $72.50 per Share under Imperial’s offer to purchase for cancellation up to $1.5 billion of its Shares.
U.S. E&PS
The board of directors of APA has declared a regular cash dividend on the company's common shares. The dividend on common shares is payable Feb. 22, 2023, to stockholders of record on Jan. 23, 2023, at a rate of 25 cents per share on the corporation’s common stock.
As per SEC filing, Diamondback Energy completed its previously announced underwritten public offering of $650,000,000 aggregate principal amount of the Company's 6.250% Notes due 2053.
Rice Acquisition Corp. II, a special purpose acquisition company focused on supply-side decarbonization solutions, and NET Power, LLC announced a definitive agreement to enter into a business combination to accelerate deployment of NET Power’s proprietary technology that delivers clean, reliable, and low-cost power from natural gas. After the business combination, the company will be named NET Power Inc. The transaction is expected to close in the second quarter of 2023 and the combined Company will be listed on the NYSE under the ticker symbol “NPWR”. Occidental is advancing feasibility studies to incorporate NET Power plants into DAC hubs being developed by its 1PointFive subsidiary, where approximately 30 – 40 plants could provide enough clean power for a DAC program capturing 100 – 135 million tonnes of CO2 per year.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
No significant news.
DRILLERS
No significant news.
REFINERS
Cash differentials for jet fuel in Chicago surged on Tuesday, Phillips 66 bidding aggressively on the product amid fears that its Wood River refinery may have to run at reduced rates due to the Keystone pipeline outage, traders said.
MLPS & PIPELINES
As per SEC filing, Euronav holder Compagnie Maritime Belge sent a letter to the board inviting it to terminate the combination agreement with Frontline.
Scorpio Tankers announced an update on Q4 2022 events, including the quarter to date Daily TCE Revenues. In December 2022, the Company entered into a time charter out agreement for an LR2 product tanker with an oil major for a future delivery for three years at an average rate of $37,500 per day, which is subject to final customer approval. The Company has given notice to exercise its purchase options on six MR product tankers (STI Battery, STI Milwaukee, STI Tribeca, STI Bronx, STI Manhattan and STI Seneca). These vessels were sold and leased back by the Company in August 2018. The leases bear interest at LIBOR plus a margin of 3.20% per annum and the purchase, which is expected to occur before the end of December 2022, will result in a debt reduction of $99.0 million for the Company. The Company has received commitments for two separate credit facilities of up to $166.5 million in aggregate. In December 2022, the Company has purchased 559,532 of its common shares in the open market at an average price of $51.20 per share as part of its new securities repurchase program, which was authorized on October 31, 2022.
Cleanup of the biggest U.S. oil spill in nearly a decade will take at least weeks more, local officials in Kansas said on Tuesday, citing a recent meeting with Keystone pipeline owner TC Energy. There is still no official timeline for a restart of the key Canada-U.S. pipeline, which was closed after the spill of roughly 14,000 barrels of crude was discovered on Wednesday in Washington County in Kansas.
MARKET COMMENTARY
Wall Street futures were muted as investors stayed away from placing big bets ahead of the Federal Reserve's much-anticipated decision on interest rates. European shares were lower amid growing concerns of a global economic slowdown. Japan's Nikkei closed at a two-week high, tracking overnight Wall Street gains. The U.S. dollar was down after cooler-than-expected inflation data and gold prices fell. Oil prices rose after OPEC and the International Energy Agency (IEA) both forecast a rebound in demand over the course of next year and as U.S. rate hikes are expected to ease alongside slowing inflation.
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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