Crude Declines as Supply Fears Ease
The energy sector is poised to open just below breakeven, with weaker crude prices being offset by major market indices bouncing back this morning to commence the second quarter. U.S. stock index futures rose, as investors digested March payrolls data which showed an increase of 431,000 jobs, below the Street estimate of 490,000. The unemployment rate declined to 3.6%, below expectations. The 10-year Treasury rate is up 4.3%, to 2.448%.
WTI and Brent crude futures are down in early trading as European governments and companies continue working on a common approach to President Vladimir Putin's demand that they pay for Russian gas in roubles while the threat of an imminent halt in supplies eased. European capitals have been on alert for a disruption to gas imports for weeks as Putin seeks retaliation over the West sanctioning Russia for invading Ukraine. A crunch point appeared to be in the offing when Moscow issued a decree on Thursday requiring foreign buyers of Russian gas to open rouble accounts in state-run Gazprombank from Friday or else risk being cut-off. OPEC's increased oil output in March fell short of its target under a deal with allies as outages in African members partly offset increases by Saudi Arabia and other top producers. OPEC pumped 28.54 million barrels per day in March, up 90,000 bpd from the previous month but short of the 253,000 bpd increase called for under its deal with allies including Russia. President Joe Biden launched the largest release ever from the U.S. emergency oil reserve and challenged oil companies to drill more in an attempt to bring down gasoline prices that have soared during Russia's war with Ukraine. Starting in May, the United States will release 1 million barrels per day of crude oil for six months from the Strategic Petroleum Reserve.
Natural gas futures dropped as NOAA's 6-10 day outlook shows above-normal temps west of the Rockies, and below-normal temps for the MS and OH River valleys. Some areas along the Northeast Coast and southern half of FL are likely to continue to see above-normal temps.
BY SECTOR:
US INTEGRATEDS
Chevron plans to begin an overhaul of the crude distillation unit (CDU) at its 245,271 barrel-per-day Richmond, California, refinery in mid-April, two sources familiar with plant operations said.
INTERNATIONAL INTEGRATEDS
Further to the announcement made by Shell on 1 March 2022 that due to Jessica Uhl’s family circumstances a long-term relocation to the UK is not sustainable, Jessica stepped down as Chief Financial Officer and as a Director of Shell with effect from March 31, 2022. Jessica will be available to assist Sinead Gorman and the Board with the transition until June 30, after which she will leave the group.
Shell Trinidad and Tobago (through BG International, a subsidiary of Shell), announced that production has started on Block 22 and NCMA-4 in the North Coast Marine Area (NCMA) in Trinidad and Tobago.
Helix Energy Solutions Group announced it has entered into a new multi-year contract with Shell Offshore to provide Well Intervention services in the U.S. Gulf of Mexico. Commencing in March 2022, the three-year contract includes an anticipated 75 day utilization per year with the option to add additional utilization days.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
Kosmos Energy announced that it has successfully re-financed its revolving credit facility and completed the semi-annual re-determination of its reserve-based lending facility. Through these financing activities and strong free cash flow in the first quarter of 2022, liquidity has been further strengthened.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
No significant news.
DRILLERS
No significant news.
REFINERS
No significant news.
MLPS & PIPELINES
DHT Holdings announced the appointment of Ms. Iman Hill to the Board of Directors, effective April 1, 2022.
MARKET COMMENTARY
U.S. stock index futures rose ahead of a key employment report, after Wall Street ended the first quarter with its biggest quarterly decline in two years in the previous session. European shares rose slightly as a rally in bank stocks helped outweigh worries about economic growth and inflation. Asian equities ended in the positive territory, though Japan’s Nikkei was down on profit-taking. A stronger dollar hurt gold prices. Oil prices fell ahead of a meeting of IEA member nations set to discuss the release of emergency oil reserves.
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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