Oil barrels
Oil

Crude Edges Lower But on Track for Weekly Gain

Oil prices on both sides of the Atlantic are moderately lower but still positive on the week and despite Monday’s steep sell-off.

SECTOR COMMENTARY:

Energy stocks are poised for a mixed to higher start, weighed down by mild weakness in the underlying commodities while the broader index futures continued to rise on positive corporate earnings.

In company news, shares of Schlumberger gained 2% in pre-market trading after the company reported a rise in second-quarter profits, citing a rebound in crude prices that revived demand for the company's oilfield services and related equipment.

Oil prices on both sides of the Atlantic are moderately lower but still positive on the week and despite Monday’s steep sell-off. "Clearly, oil bulls are back in town," said Stephen Brennock at oil broker PVM. "But that is not to say that virus concerns have completely vanished." BofA expects Brent to average $68/bbl this year and $75 next, WTI will average $65 this year and $71 next.

Natural gas futures held near a 31-month high on forecasts for hotter weather and higher air conditioning demand over the next two weeks than previously expected. For the week, the front-month was up about 9% after holding steady last week, putting the contract on track for its biggest weekly gain since February.

BY SECTOR:

US INTEGRATEDS

Workers at an Exxon Mobil Texas refinery put off considering a vote on the company's contract proposal as a lock-out neared its fourth month, a union official said. 

INTERNATIONAL INTEGRATEDS

Petroleo Brasileiro produced 2.796 million barrels of oil equivalent per day in the second quarter, the company said in a securities filing. That represented a decrease of 0.2% on annual terms and a 1.1% increase from the first quarter.

CANADIAN INTEGRATEDS

No significant news.

U.S. E&PS

Centennial Resource Development announced that Vidisha Prasad has been appointed to its Board of Directors, effective immediately. Ms. Prasad will serve as a member of the Audit Committee and Nominating, Environmental, Social and Governance Committee. Additionally, Karl Bandtel announced his retirement from the Board.

CANADIAN E&PS

MEG Energy reported its second quarter of 2021 operational and financial results. The Corporation recognized net earnings of $68 million in the second quarter of 2021 compared to a net loss of $17 million in the first quarter of 2021. The Corporation's cash operating netback averaged $31.30 per barrel in the second quarter of 2021 compared to $26.03 per barrel in the first quarter of 2021. MEG invested $70 million in the second quarter of 2021 compared to $70 million in the first quarter of 2021, which was primarily directed towards sustaining and maintenance activities during both periods.

OILFIELD SERVICES

Schlumberger Limited reported results for the second-quarter 2021. Global revenue of $5.6 billion increased 8% sequentially. International revenue was $4.5 billion and North America revenue was $1.1 billion. EPS of $0.30 increased 43% sequentially. Cash flow from operations was $1.2 billion and free cash flow was $869 million. Board approved quarterly cash dividend of $0.125 per share.

DRILLERS

Cathedral Energy Services Ltd. and Precision Drilling announced the closing of Cathedral’s acquisition of Precision’s directional drilling business for a purchase price of $6,350,000.   The Transaction includes operating assets and personnel of Precision’s directional drilling business (including its operations facility in Nisku, Alberta), along with an additional $3 million cash investment by Precision to support growth and expansion of Cathedral, including continuing the buildout of RapidFire measurement-while-drilling guidance systems and nDurance drilling motors. Additionally, the Transaction is expected to enhance margins as expenses related to rental equipment used by Precision are replaced with proprietary Cathedral tools.

REFINERS

No significant news.

MLPS & PIPELINES

Energy Transfer announced the quarterly cash distribution of $0.4609375 per Series C Preferred Unit, the quarterly cash distribution of $0.4765625 per Series D Preferred Unit, and the quarterly cash distribution of $0.4750000 per Series E Preferred Unit. These cash distributions will be paid on August 16, 2021 to Series C, Series D and Series E unitholders of record as of the close of business on August 2, 2021.

The Board of Directors of Holly Energy Partners has declared a cash distribution of $0.35 per unit for the second quarter of 2021. The distribution will be paid on August 13, 2021 to unitholders of record on August 2, 2021.

Martin Midstream Partners announced its financial results for the second quarter of 2021. The Partnership had a net loss for the three months ended June 30, 2021 of $6.6 million, a loss of $0.17 per limited partner unit. The Partnership had a net loss for the three months ended June 30, 2020 of $2.2 million, a loss of $0.06 per limited partner unit. Revenues for the three months ended June 30, 2021 were $184.3 million compared to the three months ended June 30, 2020 of $140.6 million. Revenues for the six months ended June 30, 2021 were $385.3 million compared to the six months ended June 30, 2020 of $339.5 million.

The board of directors of Magellan Midstream Partners has declared a quarterly cash distribution of $1.0275 per unit for the period April 1 through June 30, 2021.

MARKET COMMENTARY

Wall Street futures rose, while investors awaited a flash reading on business service data for clues on the health of U.S. economy. European stocks were in the green, as optimism about the earnings season and the European Central Bank's pledge of continued monetary support outweighed risks of a resurgence in COVID-19 cases. In Asia, Hong Kong stocks fell as deepening concerns over Beijing's tighter regulations weighed on sentiment. Gold traded in a narrow range as a stronger dollar dimmed bullion's appeal. Oil prices edged lower.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

MarketInsite

Nasdaq’s Marketinsite offers actionable insights on a variety of market-moving topics. Learn from our thought leaders who are driving the capital markets of tomorrow.

Read MarketInsite's Bio