The energy sector is poised for a lower start, weighed down by weakness in the crude complex and major equity indices which fell on the backs of poor economic data out of China and Germany which put the focus back on the impact of a bruising Sino-U.S. trade war. China reported a raft of unexpectedly weak data for July, including a surprise drop in industrial output growth to a more than 17-year low while German reported a slump in exports. Meanwhile, sector news is very thin today offering little reprieve from macro headlines.
WTI crude oil futures are down roughly 3.5% in early trading, slightly trailing Brent, pressured by last night API report and the weak economic data from China and Germany. The industry inventory report showed crude inventories unexpectedly rose by 3.7 million barrels last week while analysts had forecasted a 2.8 million barrel draw. Traders will be looking to the EIA data later today for confirmation.
Natural gas futures are up over 2% this morning, backed by warming weather forecasts in key consuming regions that should stir demand.
Canaccord Genuity downgraded Abraxas Petroleum to ‘Speculative Buy’ from ‘Buy.’
(Late Tuesday) Reuters - Occidental Petroleum sees Q3 2019 Anadarko Legacy U.S. production of 585 mboed to 630 mboed, FY Anadarko Legacy U.S. production of 605 – 630 mboed, and FY 2019 Anadarko Legacy capital spend of $4.1 billion.
UBS Equities upgraded Southwestern Energy to ‘Neutral’ from ‘Sell.’
Press Release - Obsidian Energy announced its financial and operational results for the three and six months ended June 30, 2019. Obsidian Energy maintained strong operational and financial results in the second quarter and continued to focus on its high-quality, light oil Cardium asset. In the quarter, the Company averaged 27,835 boe per day (67 percent oil and NGL's), an increase of 184 boe per day from the first quarter of 2019, despite no new development drilling taking place due to spring break-up. The strong production is attributed to the five Cardium wells that were brought on early in the quarter, as well as an accelerated optimization program that exceeded expectations. Production from the Cardium remained robust at 20,289 boe per day, a five percent increase over the first quarter of 2019 and a 10 percent increase versus the second quarter of 2018. These wells are offsetting the Phase 2 locations that the Company is currently drilling.
Press Release - Touchstone Exploration announced its financial and operational results for the three and six months ended June 30, 2019. Touchstone generated second quarter 2019 funds flow from operations of $1,310,000 ($0.01 per share), representing a decrease of $1,197,000 or 48% from the prior year comparative period. The variance was mainly a result of increased current income taxes recorded in the 2019 second quarter, as increased supplemental petroleum tax was incurred based on minimal developmental capital activity in the second quarter of 2019. As a result, we recognized a net loss of $833,000 ($0.01 per share) in the second quarter of 2019 versus a net loss of $523,000 ($0.00 per share) in the equivalent prior year quarter.
(Late Tuesday) Press Release - Halliburton announced that its board of directors has declared a 2019 third quarter dividend of eighteen cents ($0.18) a share on the Company’s common stock payable on September 25, 2019 to shareholders of record at the close of business on September 4, 2019.
MLPS & PIPELINES
Press Release - Crestwood Equity Partners announced that it has begun commercial operations at the Bear Den II processing plant in Watford City, North Dakota. Concurrently, Crestwood brought online the Station 8 Compression Facility, a 27,500 HP electric driven trunkline compression station, and expanded the Bear Den West and Bear Den Loop pipelines, 36-miles of 20-inch high pressure lines that connect the Bear Den processing complex to the Arrow gathering system.
Press Release - Intercontinental Exchange, Inc., and Magellan Midstream Partners, announced the addition of dock capacity auctions for ICE Permian WTI crude oil futures contracts (HOU) at Magellan’s terminals in Galena Park and Seabrook.
Evercore ISI downgraded MPLX to ‘In Line’ from ‘Outperform.’
Wall Street futures were lower, mirroring European shares as weak economic data from Europe and China revived fears of global recession. Asian equities ended in the green after U.S. President Donald Trump delayed the tariffs on some Chinese imports. The safe-haven Japanese yen continued to strengthen against the dollar, while gold prices rose. Oil was down following a rise in U.S. crude inventories.
NASDAQ ENERGY TEAM THOUGHT LEADERSHIP
- 5/2/19 - CNBC Worldwide Exchange – Energy sector M&A
- 4/23/19 - Bloomberg Daybreak Asia – Iran sanctions implications
- 3/26/19 - CNBC World Wide Exchange – Energy sector performance
- 3/18/19 - Bloomberg Daybreak Asia – OPEC meeting, Iran sanctions
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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