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Oil

Crude Edges Lower on Weak Economic Data, COVID-19 Concerns

WTI and Brent crude oil futures inched lower this morning, pressured by weak economic data and renewed worries over the COVID-19 pandemic but reports showing further shuttering of offshore operations in the Gulf of Mexico and a drop in U.S. crude inventories, buoyed prices.

SECTOR COMMENTARY

The energy sector is poised for a mixed to lower start, weighed down by weakness in the crude complex while broader equity indices were flat after a series of new record highs for the S&P 500 and Nasdaq, seesawing on the backs of bleak consumer confidence data and as investors steadied ahead of the Fed Chairs speech this week at Jackson Hole.

WTI and Brent crude oil futures inched lower this morning after touching a five-month high in the previous session, pressured by weak economic data and renewed worries over the COVID-19 pandemic but reports showing further shuttering of offshore operations in the Gulf of Mexico ahead of Hurricane Laura and a report showing a drop in U.S. crude inventories, buoyed prices. The latest numbers show Producers shut 1.56 million bpd of crude output, representing 84% of the Gulf of Mexico's offshore production and close to the 90% outage that Hurricane Katrina brought 15 years ago. Ahead of the official data later this morning, last night’s API supply report showed U.S. crude oil and gasoline stockpiles dropped last week, significantly more than anticipated while distillate stocks saw a surprise build.

Natural gas futures rebounded this morning from yesterday’s retreat, backed by a drop in daily output to its lowest since May as Laura caused Gulf Coast producers to shut offshore wells.

U.S. INTEGRATEDS

(Late Tuesday) Reuters - Exxon Mobil Beaumont, Texas complex reported operations require flaring.

INTERNATIONAL INTEGRATEDS  

(Late Tuesday) Reuters - Petrobras has made an early repayment on $2.1 billion of revolving credit lines.

Barclays upgraded Repsol to ‘Equal Weight’ from ‘Underweight’.

Barclays downgraded Shell to ‘Underweight’ from ‘Equal Weight’.

U.S. E&PS  

Johnson Rice initiated coverage of Murphy Oil with a ‘Buy’ rating.

(Late Tuesday) Press Release - Occidental announced the early tender results for the 2021 Notes in connection with its offers to purchase for cash its outstanding 4.10% Senior Notes due 2021, 2.600% Senior Notes due 2021, Floating Interest Rate Notes due August 2021, Floating Interest Rate Notes due August 2022, 2.600% Senior Notes due 2022, 2.700% Senior Notes due 2022, 3.125% Senior Notes due 2022 and 2.70% Senior Notes due 2023 up to a maximum aggregate purchase price, excluding accrued but unpaid interest, of $3,000 million.

OILFIELD SERVICES

(Late Tuesday) Press Release - KBR announced its Board of Directors has declared a regular cash dividend of ten cents ($0.10) per share on the company's common stock, par value $0.001 per share, to be paid on October 15, 2020, to stockholders of record on September 15, 2020.

(Late Tuesday) Press Release - Oceaneering International announced its Space Systems business has been contracted by Dynetics, Inc. (Dynetics), a wholly owned subsidiary of Leidos, to develop mission-critical components for Dynetics' submission to National Aeronautics and Space Administration's (NASA) Human Landing Systems (HLS) for the Artemis Program.

DRILLERS 

Press Release - RPC announced yesterday's appointment of Gary W. Rollins as Chairman of its Board of Directors. Rollins, who joined the RPC, Inc. In addition, Harry J. Cynkus and Jerry W. Nix have been appointed to the Board of Directors of the Company. 

Credit Suisse terminated coverage on Valaris.

MLPS & PIPELINES   

(Late Tuesday) Press Release - Pipestone Energy was notified by Keyera on August 17, 2020 of an issue relating to the Waste Heat Recovery System within the Keyera Wapiti Gas Plant. This failure has resulted in an unplanned outage. After performing an inspection of the affected equipment, Keyera expects the repairs to be completed and the Keyera Plant to resume operations by the end of next week. During this outage, both Pipestone Energy and Keyera are performing maintenance and installation activities that would have resulted in planned downtime during late Q3 and early Q4 2020.

Piper Sandler upgraded Noble Midstream Partners to ‘Overweight’ from ‘Neutral’.

(Late Tuesday) Press Release - Summit Midstream Partners, LP announced that its subsidiaries, Summit Midstream Holdings, LLC and Summit Midstream Finance Corp., have commenced cash tender offers to purchase a principal amount of the Issuers' outstanding 5.75% Senior Notes due 2025 and outstanding 5.50% Senior Notes due 2022 in separate modified "Dutch Auctions" pursuant to the terms and subject to the conditions set forth in the Offer to Purchase, dated the date hereof. The maximum amount of 2025 Notes that may be purchased in the Tender Offers will be a principal amount of 2025 Notes that could be purchased with a purchase price, excluding Accrued Interest, of up to $60,000,000, and the maximum amount of 2022 Notes that may be purchased in the Tender Offers will be a principal amount of 2022 Notes that could be purchased with a purchase price, excluding Accrued Interest, of up to $60,000,000 less the aggregate purchase price, excluding Accrued Interest, of 2025 Notes purchased in the Tender Offers.

MARKET COMMENTARY

Futures tied to the S&P 500 were little changed after bleak consumer confidence data provided a sobering view on the health of the economy, while investors held back ahead of Federal Reserve Chair Jerome Powell's speech this week. Asian stocks were mostly in the green. European shares were majorly up as hopes of additional stimulus for Germany and France outweighed worries about rising COVID-19 cases in the continent. Spot gold slipped as the dollar gained. Oil prices fell.

NASDAQ ENERGY TEAM THOUGHT LEADERSHIP


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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