Crude Climbs on Weaker U.S. Dollar, Tight Supply
The energy sector is set for a higher start, supported by strength in the underlying commodities and the major equity futures. U.S. equity futures are trading up as investors await another round of earnings from big U.S. banks and on easing bets of a more aggressive Federal Reserve.
WTI and Brent crude oil are trading higher on a weaker dollar and tight supply which overshadowed recession concerns and the potential of wide-spread COVID-19 restrictions in China. Last week, oil futures on both sides of the Atlantic recorded their biggest weekly declines for about a month on fears that a recession and the spread of the new highly transmissible subvariant of COVID-19 in China, would put a dent in oil demand. The U.S. dollar retreated from multi-year highs this morning, increasing investor interest in commodities such as gold and oil. Over the weekend, U.S. President Joe Biden told Arab leaders that the U.S. would remain an active partner in the Middle East, but he failed to secure commitments to boost oil supply. Markets are focused this week on the resumption of Russian gas flows to Europe via the Nord Stream 1 pipeline which investors worry may be delayed due to the ongoing war in Ukraine.
Natural gas futures rose this morning on warmer weather forecasts in key consuming regions that should spur more demand.
BY SECTOR:
US INTEGRATEDS
No significant news.
INTERNATIONAL INTEGRATEDS
Aramco has awarded Worley in-Kingdom and out-of-Kingdom project management services contracts. Under the contracts, Worley will provide front-end engineering design (FEED), detailed design support, project management services and construction management services.
BP Azerbaijan is not planning to pump oil through the Baku-Supsa pipeline in August and will instead redirect next month's volume to the Baku-Tbilisi-Ceyhan pipeline, Vice-President Bakhtiyar Aslanbeyli said.
Eni completed the construction of the oilseed collection and pressing plant (agri-hub) in Makueni, Kenya, and started production of the first vegetable oil for bio-refineries. The first agri-hub will have an installed capacity of 15,000 tons with an expected production of 2,500 tons in 2022.
Petrobras announced the final results and settlement of the previously announced cash tender offers by its wholly-owned subsidiary, Petrobras Global Finance B.V., with respect to any and all of PGF's outstanding notes of the series set forth. The aggregate amount paid by PGF to holders whose Notes were accepted for purchase, excluding accrued and unpaid interest, was approximately US$790.9 million, as converted on the basis set forth in the Offer Documents.
Petrobras informed that its Executive Board resolved on the approval of the 1st Debenture Repurchase Plan, authorizing the acquisition of debentures issued by the Company itself for holding in treasury or subsequent sale.
Worley announced that it has been awarded a three-year contract by Shell to provide engineering and procurement services for several of its assets in the Gulf of Mexico (GOM).
Shell New Energies NL BV, ENGIE, Vopak and Anthony Veder have signed an agreement to study the feasibility of producing, liquifying and transporting green hydrogen from Portugal to the Netherlands, where it would then be stored and distributed for sale.
Brazilian planemaker Embraer SA signed a letter of intent with Raizen SA to stimulate the production of a sustainable aviation fuel (SAF), the company said. The partnership with Raizen, a joint venture between Cosan SA and Shell PLC, is part of Embraer's strategy to zero the carbon footprint of its operations by 2040, since more than 60% of the company's emissions stem from the use of aviation kerosene in production tests and flights.
CANADIAN INTEGRATEDS
Suncor announced that it has entered into an agreement with Elliott Investment Management L.P., pursuant to which Suncor's Board of Directors will appoint three new independent directors, two of whom will serve on the CEO search committee. The Board will also form a new committee to oversee a strategic review of Suncor's downstream retail business. As part of its agreement with Elliott, Suncor has appointed the following three new independent directors to its Board, effective immediately: Ian Ashby, former president of BHP Billiton's Iron Ore Customer Sector Group, who brings extensive global experience in surface mining, including technical and operational expertise; Chris Seasons, former president of Devon Canada and partner with ARC Financial Corporation; and Jackie Sheppard, former executive vice president, Corporate and Legal Affairs with Talisman Energy Inc.
U.S. E&PS
The Goldman Sachs group downgraded Comstock Resources to a Sell rating from a Neutral rating.
As per SEC filing, Earthstone Energy filed for the offering of up to 29.84 million shares of Class A common stock by the selling stockholders.
As per SEC filing, Earthstone Energy filed for the resale of up to 5.7 million shares of Class A common stock by the selling stockholders.
As per SEC filing, on July 15, 2022, Earthstone Energy entered into the Company's standard indemnification agreement with Douglas E. Swanson, Jr., a member of the Board of Directors the Company, pursuant to which the Company agreed to indemnify Mr. Swanson in connection with claims brought against him in his capacity as a director of the Company.
As per SEC filing, on July 14, 2022, Hess and one of its indirect wholly-owned subsidiaries entered into a credit agreement with the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent. The Credit Agreement provides for commitments by the lenders thereunder in the form of committed revolving loans and by issuing banks thereunder in the form of letters of credit (in an aggregate amount not to exceed $2 billion, of which $800 million is committed as of the Effective Date), in an aggregate amount of up to $3.25 billion. The Revolving Credit Facility includes an accordion feature, pursuant to which the aggregate commitments may be increased by up to an additional $1 billion under certain circumstances. The Credit Agreement expires on July 14, 2027, unless earlier terminated or extended in accordance with its terms.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
No significant news.
DRILLERS
Precision Drilling announced that it has entered into an asset purchase agreement to acquire the well servicing business and associated rentals assets of High Arctic Energy Services for an aggregate purchase price of $38.2 million, payable in cash.
REFINERS
No significant news.
MLPS & PIPELINES
No significant news.
MARKET COMMENTARY
Wall street futures extended gains from the previous week ahead of another round of earnings from big U.S. banks and on scaled-back bets of an aggressive interest rate hike by the Federal Reserve. European indexes were trading higher. Chinese and Hong Kong shares ended in the green after government stepped up efforts to ease property market woes. The euro firmed against the dollar while gold prices rose. Oil prices jumped as tight supplies eased demand concerns. IBM is expected to report second-quarter earnings after markets close.
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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