Oil barrels
Oil

Crude Edges Higher, But Demand Concerns Remain as Coronavirus Cases Rise

Oil is up fractionally after yesterday’s losses which were driven by demand concerns due to rising COVID-19 cases in the US, some EU nations considering full lockdowns due to the virus and Libya output rising to nearly 700K bpd.

SECTOR COMMENTARY

Energy stocks are boosted after broader markets rebound from yesterday’s tumble and on stabilization in oil prices.  In earnings news, BP is lower following its Q3 results during which it said that the shape and pace of a recovery in oil demand remains uncertain. Total SA is also down following its Q3 results during which they said that they have no plans to lower crude production volumes.  Energy Transfer is weighing on the midstream space after a 50% distribution cut.

Oil is up fractionally after yesterday’s losses which were driven by demand concerns due to rising COVID-19 cases in the US, some EU nations considering full lockdowns due to the virus and Libya output rising to nearly 700K bpd.

Natural gas is down fractionally ahead of contract expiration tomorrow.  Wintery weather continues across much of the Midwest today with temperatures as far South as Texas reach freezing.

INTERNATIONAL INTEGRATEDS                                              

Reuters - BP reported $86 million underlying replacement cost profit, the company's definition of net income, for the three months to Sept. 30, beating analysts' expectations of a loss of $120 million. It followed a record $6.7 billion loss in the previous quarter, when it also halved its dividend. BP also announced a quarterly dividend of 5.25 cents per ordinary share ($0.315 per ADS), which is expected to be paid on 18 December 2020.

Reuters - Eni and its adviser Citi expect binding bids for the Italian energy group's gas assets in Australia by the end of November in a deal that could raise around $1 billion.

Reuters - Petroleo Brasileiro received multiple binding offers on Monday for its 51% majority stake in its Gaspetro natural gas unit, including one from Compass Gas e Energia

(Late Monday) Reuters - Cosan SA said on Monday that its subsidiary Compass Gas e Energia has placed a bid for state-run oil company Petroleo Brasileiro’s 51% stake in Gaspetro.

Press Release - Total, through Total Quadran, a wholly-owned affiliate dedicated to developing and producing renewable energy in France, was awarded 67 megawatt-peak (MWp) of solar projects representing 20% of the volumes awarded in the eighth period of the CRE (French Energy Regulatory Commission) call for tenders. Total is thus consolidating its position as France's second-largest solar developer with 606 MW of projects in all the sections of the calls for tenders.

U.S. E&PS  

Press Release - Penn Virginia announced an operational update and timing of its third quarter 2020 earnings release and conference call.  Its estimated sales for the third quarter of 2020 were 18,383 barrels of oil per day, which is above the mid-point of the guidance range. Its generated free cash flow for the third quarter of 2020, which allowed the Company to lower debt by approximately $35 million from the second quarter of 2020.

Press Release - Ring Energy announced that it intends to offer and sell a combination of shares of its common stock and warrants to purchase shares of its common stock in an underwritten public offering. As part of this offering, Ring Energy intends to grant the underwriters a 45-day option to purchase up to an additional fifteen percent (15%) of the shares of common stock and/or warrants offered in the public offering.

Press Release - Ring Energy announced it has cancelled the registered direct offering of the Company’s securities announced last Thursday. The previously announced offering—which was subject to required regulatory approvals which have not yet been received—was for the purchase and sale to institutional investors of $18 million of shares of the Company’s common stock, pre-funded warrants and common warrants.

CANADIAN E&PS 

(Late Monday) Press Release - MEG Energy reported its third quarter of 2020 operational and financial results. Its adjusted funds flow was $27 million ($0.09 per share), impacted by lower sales volumes due to major planned turnaround activities. MEG’s quarterly production volumes of 71,516 barrels per day (bbls/d) at a steam-oil ratio (SOR) of 2.36, while completing major planned turnaround activities. Due to better than expected production levels during and post-turnaround, annual average production guidance has been revised higher to 81,000 - 82,000 bbls/d. The Corporation recognized a net loss of $9 million in the third quarter of 2020 compared to a net loss of $80 million in the second quarter of 2020.

OILFIELD SERVICES 

Press Release - CGG is pleased to announce that Nebula 3D Phase I is nearing completion and acquisition will soon commence on Phase II.

Zephirin upgraded Core Laboratories and National Oilwell Varco to ‘Buy’ from ‘Sell’.

Press Release - National Oilwell Varco reported third quarter 2020 revenues of $1.38 billion, a decrease of seven percent compared to the second quarter of 2020 and a decrease of 35 percent compared to the third quarter of 2019. Net loss for the third quarter of 2020 improved $38 million sequentially to $55 million, or -4.0 percent of sales, which included non-cash, pre-tax charges of $62 million. Adjusted EBITDA decreased $13 million sequentially to $71 million, or 5.1 percent of sales.

(Late Monday) Press Release - Pason Systems is pleased to announce the appointment of Celine Boston as Pason's Chief Financial Officer effective November 30, 2020.

Zephirin upgraded Helix Energy Solutions Group, Patterson-UTI Energy and TechnipFMC to ‘Buy’ from ‘Hold’.

DRILLERS 

(Late Monday) Press Release - Transocean Ltd. announced on behalf of Transocean Inc., its wholly-owned subsidiary, the results to date of the Company’s previously announced tender offers to purchase for cash (i) any and all of its outstanding 6.500% Senior Notes due 2020 and (ii) up to the Maximum Amount of (a) its outstanding 6.375% Senior Notes due 2021, 3.800% Senior Notes due 2022 and 7.250% Senior Notes due 2025 and (b) the 5.375% Senior Secured Notes due 2023 issued by Transocean Sentry Limited, a wholly-owned subsidiary of Transocean Ltd, in each case, from holders thereof.

MLPS & PIPELINES   

Press Release - Crestwood Equity Partners reported its financial and operating results for the three months ended September 30, 2020. Its third quarter 2020 net income was $4.6 million, compared to net income of $33.6 million in third quarter 2019. The company announced third quarter 2020 cash distribution of $0.625 per common unit, or $2.50 per common unit on an annualized basis, payable on November 13, 2020, to unitholders of record as of November 6, 2020.

Press Release - Energy Transfer LP announced a quarterly cash distribution of $0.1525 per ET common unit ($0.61 on an annualized basis) for the third quarter ended September 30, 2020. The announced quarterly distribution will be paid on November 19, 2020 to unitholders of record as of the close of business on November 6, 2020.

Press Release - NuStar Energy announced that its Board of Directors has declared a third quarter 2020 common unit distribution of $0.40 per unit. The third quarter common unit distribution will be paid on November 13, 2020 to holders of record as of November 6, 2020.

MARKET COMMENTARY

U.S. stock index futures were slightly higher as investors parsed through a deluge of corporate results, while bracing for volatility ahead of the elections. European stocks fell, as worries about the economic fallout of tighter coronavirus restrictions countered gains from upbeat earnings of top companies. Asian equities ended on a mixed note. The dollar index and gold prices were little changed. Crude prices gained as oil companies shut down some Gulf of Mexico output due to Hurricane Zeta. Microsoft is among the companies reporting results after the closing bell. The U.S. durable goods data is on the economic calendar.


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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