Leadership

Crude Extends Losses, Driven by Concerns of a Sharp Economic Slowdown

Monday, March 25, 2019

SECTOR COMMENTARY

The energy sector is poised for a lower start, pressured by weakness in the underlying commodities while broader equity futures were flat as investors struggled to shrug off global economic slowdown worries which were triggered by Friday’s weak factory data, despite a report that President Trump did not collude with Russia. 

Oil prices on both sides of the Atlantic extended Friday’s losses, driven by concerns of a sharp economic slowdown which overshadowed support from tighter supply due to OPEC's production cuts and U.S. sanctions on Iran and Venezuela. "Oil remains in a tug-of-war between fundamentals and a fickle sentiment in the global financial markets," said Vandana Hari of consultancy Vanda Insights.

Natural gas futures are also lower, weighed down by warmer weather forecasts than previously expected which should limit heating demand in key consuming regions.

INTERNATIONAL INTEGRATEDS

Press Release - TechnipFMC has been awarded a large integrated Engineering, Procurement, Construction, Transportation and Installation (iEPCI) contract by Eni for the Merakes project, located offshore Balikpapan Indonesia, at a water depth of approximately 1,500 meters. This contract covers five deepwater wells, and their 50-kilometer tie back to the existing Jangkrik Floating Production Unit in Indonesia. The project scope includes engineering, procurement, installation and pre-commissioning of subsea equipment such as subsea trees, a manifold, large bore deepwater high pressure flexible lines, umbilicals and distribution hardware, flexible risers, flowlines and jumpers.

Reuters - Repsol buys 17 percent of Recreus, a Spanish company that develops, produces and markets 3D printing materials. The company is developing modified polymers to be used as raw material for different 3d printing technologies.

Press Release - Royal Dutch Shell will begin supplying renewable electricity to more than 700,000 homes in the UK this week as it powers up plans to take become the world's biggest electricity company. Under the brand Shell Energy, it will become one of the country's biggest green power suppliers overnight when it replaces First Utility, a year after acquiring the "big six" challenger brand.

Reuters - Royal Dutch Shell said it had shipped the first condensate cargo from its Prelude floating liquefied natural gas (FLNG) project off northwestern Australia over the weekend.

(Sunday) Reuters - Just over a year after buying First Utility, Royal Dutch Shell has rebranded the British household energy supplier and is switching all its customers to renewable electricity as the oil and gas giant seeks to expand its low-carbon business. The move by the Anglo-Dutch company poses a challenge for Britain's long-standing retail power suppliers whose profit margins have come under growing pressure due to intense competition and the regulator's price cap.

CANADIAN INTEGRATEDS

Reuters - Imperial Oil reported on-site release of liquid product from a line at its Sarnia, Ontario site. The line was isolated and leak contained.                       

U.S. E&PS

Press Release - EQT announced that it has released an investor presentation outlining its ongoing strategic plan to drive cost reductions across the business and generate sustainable free cash flow growth. EQT anticipates generating adjusted free cash flow (a non-GAAP measure) of approximately $300 to $400 million in 2019 and $2.9 billion over the next five years, up from the $2.7 billion announced in January – with the Company’s ongoing Target 10% Initiative providing incremental upside. EQT expects first quarter 2019 sales volumes to come in at the high-end of the guidance range of 360 to 380 Bcfe while anticipating first quarter 2019 capital expenditures in-line with expectations. This supports the ongoing operational and capital efficiency efforts implemented by senior management.

Press Release - W&T Offshore announced the Company was the apparent high bidder on 15 blocks in the Gulf of Mexico Lease Sale 252 held by the Bureau of Ocean Energy Management ("BOEM") on March 20, 2019. W&T was the apparent high bidder on eight deepwater and seven shallow water blocks, which includes Garden Banks 173, Green Canyon blocks 3, 46, 47, 49, 91 and 92 and Mississippi Canyon 244 in the deepwater and Eugene Island blocks 357, 378, 393, 395, 396, Main Pass 286, and South Marsh 205 in the shallow water. 

OILFIELD SERVICES

Press Release - KBR announced that its global government services business, KBRwyle, has been awarded three contracts totaling $95.7 million to support cybersecurity and engineering efforts for the U.S. military.

Reuters - TechnipFMC anticipates that iEPCI awards are likely to exceed 25 percent of total Subsea inbound orders in 2019. It has included Subsea 2.0 technologies in 60 percent of all Subsea FEED studies undertaken since January 2018. It adds in investor presentation on its website that company is well-positioned in LNG sector and has good capital discipline.

Press Release - TechnipFMC has been awarded a large integrated Engineering, Procurement, Construction, Transportation and Installation (iEPCI) contract by Eni for the Merakes project, located offshore Balikpapan Indonesia, at a water depth of approximately 1,500 meters. This contract covers five deepwater wells, and their 50-kilometer tie back to the existing Jangkrik Floating Production Unit in Indonesia. The project scope includes engineering, procurement, installation and pre-commissioning of subsea equipment such as subsea trees, a manifold, large bore deepwater high pressure flexible lines, umbilicals and distribution hardware, flexible risers, flowlines and jumpers.

MLPS & PIPELINES

(Late Friday) Reuters - The amount of gas flowing to Cheniere Energy’s Sabine Pass liquefied natural gas export terminal in Louisiana fell on Friday from a record high earlier in the week. Energy traders said the second liquefaction train at Sabine and maybe another unit was likely out of service. Some said the outage could last two weeks.

MARKET COMMENTARY

U.S stock futures were slightly lower amidst recession fears, reflecting a similar mood in global equities. The sour mood was tempered a bit by better-than-expected business confidence survey from Germany, which lifted the euro against the yen. The dollar index edged lower. Meanwhile, gold edged up while oil prices were steady.

NASDAQ ENERGY TEAM THOUGHT LEADERSHIP


Nasdaq Advisory Services Energy Team Nasdaq's Advisory Services 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.

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

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