Crude Edges Higher After Mixed U.S. Data
SECTOR COMMENTARY
Energy stocks are set to open lower, with modestly higher oil prices being offset by weaker broader index futures. The S&P 500 Index is set to open lower by more than half a percent (as of 8:35 AM ET). Sector news remains light. Weekly jobless claims just released showed a larger than expected 1.51 million claims, versus expectations of 1.3 million claims, which has deepened equity futures losses as it is being closely followed to monitor the continued impacts of the COVID-19 pandemic on the employment and economic front.
WTI crude oil is up around 0.4%, at $37.96, while Brent crude oil is higher by ~0.8%, trading around $41.05. Prices ticked up after U.S. oil product stocks shrank, providing bulls with ammunition ahead of a meeting between OPEC producers and their allies to discuss their future output strategy. A rise in U.S. crude stockpiles to a record high for a second week in a row weighed on sentiment, but U.S. government data showed lower inventories of gasoline and distillates, which includes diesel and heating oil, indicating higher demand.
Natural gas futures are lower by a penny, around $1.62, ahead of weekly inventory data. Prices eased on a continued drop in LNG exports as the market waits for direction from a federal report expected to show a near normal storage build last week. Analysts said utilities likely injected 85 bcf during the week ended June 12. That compares with an increase of 111 bcf during the same week last year and a five-year (2015-19) average build of 87 bcf for the period.
U.S. INTEGRATEDS
Reuters - Chevron is putting up for sale its stake in Australia's biggest and oldest liquefied natural gas project, the North West Shelf LNG project, after drawing interest from potential buyers. "Chevron Australia has made the decision to market its non-operated one-sixth interest in the North West Shelf (NWS) project, following a number of unsolicited approaches from a range of credible buyers," it said in an emailed statement.
INTERNATIONAL INTEGRATEDS
(Late Wednesday) Reuters - Petroleo Brasileiro is resuming plans to unload its remaining stake in the country's top gas station operator, Petrobras Distribuidora, two people with knowledge of the matter said. Petrobras will try to conclude the offering during the second half of the year, the sources added, speaking on condition of anonymity because the talks are private. BR Distribuidora, as the company is informally known, was privatized last year through a share offering. Now, Petrobras wants to sell as much as possible of its 37.5% remaining stake in the company, which operates some 7,700 service stations throughout Brazil.
U.S. E&PS
(Late Wednesday) Press Release - Laredo Petroleum named Bryan Lemmerman as Senior Vice President and Chief Financial Officer, effective June 30, 2020. Michael Beyer will be leaving the Company effective June 17, 2020. Mr. Lemmerman has more than 15 years of experience in the energy exploration and production industry, including an extensive background in strategic planning and business development. He previously spent 10 years with Chesapeake Energy, serving in financial roles with increasing responsibility, most recently as Vice President – Business Development and Treasurer. Prior to joining Chesapeake, Mr. Lemmerman was a portfolio manager at Highview Capital Management and Ritchie Capital Management, overseeing investments in public and private energy companies. He began his career as a tax consultant with Deloitte & Touche. Mr. Lemmerman holds a Bachelor of Business Administration in Accounting and Master of Science in Accounting from Texas A&M University and a Master of Business Administration from the University of Texas.
Press Release - Matador Resources announced the results from the first five wells completed and turned to sales on the Ray State tract in the Rustler Breaks asset area and provided updates on the Rodney Robinson wells in the Antelope Ridge asset area and upcoming milestones for the remainder of 2020.
MKM Partners initiated coverage of QEP Resources at ‘Buy’.
CANADIAN E&PS
(Late Wednesday) Press Release - MEG Energy announced that at its annual and special meeting of shareholders held on June 17, 2020, each of the ten (10) nominees listed in its Management Information Circular dated May 5, 2020, were elected as Directors. The new Board has appointed Mr. Ian D. Bruce as Chair of the Board.
OILFIELD SERVICES
(Late Wednesday) Press Release - Fluor announced that Stork, part of Fluor’s Diversified Services segment, was awarded a 5-year maintenance contract by Delamine B.V in the Netherlands. Fluor booked the undisclosed contract value in the second quarter of 2020. The five-year maintenance contract begins July 1, 2020.
MLPS & PIPELINES
(Late Wednesday) Press Release - DCP Midstream announced that its wholly owned subsidiary, DCP Midstream Operating, priced an upsized offering of $500 million aggregate principal amount of its 5.625% senior notes due 2027 at a price to the public of 100% of their face value. The Senior Notes will be fully and unconditionally guaranteed by the Partnership. The offering is expected to close on June 24, 2020, subject to the satisfaction of customary closing conditions.
(Late Wednesday) Press Release - Enterprise Products Partners announced that the company’s ethylene export terminal at Morgan’s Point, Texas, a joint venture with Navigator Holding, has exceeded design interim loading capacity and expects to export more than 175 million pounds for the month of June.
MARKET COMMENTARY
Caution over an uptick in new coronavirus cases in parts of the U.S. and other economies weighed on Wall Street futures and European shares. In Asia, Japan’s Nikkei ended lower. The dollar was little changed against its rival currencies. Gold prices pared gains.
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.
This communication and the content found by following any link herein are being provided to you by Corporate Solutions, a business of Nasdaq, Inc. and certain of its subsidiaries (collectively, “Nasdaq”), for informational purposes only. Nasdaq makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Sources include Reuters, TR IBES, WSJ, The Financial Times and proprietary Nasdaq research.