Oil
Oil

Crude Gains as OPEC+ Maintains Output Plan

The energy sector is poised for a higher start, supported by strength in the crude complex and the major market futures which rose this morning on a slew of upbeat earnings results.

The energy sector is poised for a higher start, supported by strength in the crude complex and the major market futures which rose this morning on a slew of upbeat earnings results. Tensions in Eastern Europe continue to rise as Russian President Vladimir Putin accused the West on Tuesday of deliberately creating a scenario designed to lure it into war and ignoring Russia’s security concerns over Ukraine, fanning fears that energy supplies to Europe could be disrupted.  

WTI and Brent crude oil futures are higher in early trading, gaining amid OPEC+’s decision to stick to its planned output increase despite pressure to increase supply and lingering geopolitical tensions in Eastern Europe and the Middle East. Ahead of the official EIA data later today, investors also digested last night’s API report which showed U.S. crude stocks fell by 1.6 million barrels last week, against analysts' estimate of an increase of 1.5 million barrels. OPEC+ agreed to raise its oil output by 400,000 barrels per day in March, despite pressure from top consumers to speed up production increases after crude prices hit seven-year highs. OPEC+ blamed surging prices on the failure of consuming nations to ensure adequate investment in fossil fuels as they shift to greener energy.

Natural gas futures surged higher this morning, supported by colder weather forecasts, higher heating demand and winter storms which are expected to further curtail gas production. A major winter storm is expected to fall on much of the central United States and stretch to parts of the Northeast this week, brining heavy snow, freezing rain, and ice, the National Weather Service said on Monday.

BY SECTOR:

US INTEGRATEDS

No significant news.

INTERNATIONAL INTEGRATEDS                                           

Drilling operations on the Ginny exploration well 6407/9-13, operated by EquinorEnergy AS, are now being concluded.

Norway has approved plans to develop several Equinor-operated gas and condensate discoveries in the Norwegian Sea, the ministry for petroleum and energy said.

Cognite announced that Saudi Aramco, via its subsidiary Aramco Overseas Company B.V., has invested in Cognite by purchasing 100% of Aker BP's shares in the company.

Petrobras, following up on the releases disclosed on 11/22/2016, 03/21/2018 and 12/09/2021, informed that it received from Equinor Brasil Energia Ltda. the amount of US$ 475 million, equivalent to half of the third installment related to the sale of its stake in the exploratory block BM-S-8, where is located the Bacalhau field (former Carcará area). The remaining amount of US$ 475 million will be paid on 02/10/2022.

A significant oil spill has taken place at Repsol’s La Pampilla oil refinery in Peru. Repsol has chosen Lamor as one of the service providers to provide equipment and services in the response and cleanup of the oil spill. In the first phase, Lamor is acting as a technical consultant and solution provider.

According to Reuters, Enagas, Repsol and Port of Cartagena agreed to develop circular economy project for use of refrigeration.

TotalEnergies and Veolia have signed an agreement to produce biomethane from Veolia waste and water treatment facilities operating in more than 15 countries.

Saft, a wholly owned subsidiary of TotalEnergies, has been awarded a major contract by Neoen, the leading French independent producer of renewable energy, to deliver a turnkey 8MW/8MWh ESS project in Antugnac, (southern France).

Total Eren, a leading renewable energy Independent Power Producer based in Paris, announced that it has successfully commissioned the “Terra Santa” (92.3 MW) and “Maral” (67.5 MW) wind farms in the State of Rio Grande do Norte, Brazil.

CANADIAN INTEGRATEDS

No significant news.                       

U.S. E&PS

W&T Offshore announced that it has closed its previously announced acquisition of oil and gas producing properties in Federal shallow waters in the central region of the Gulf of Mexico at Ship Shoal 230, South Marsh Island 27/Vermilion 191, and South Marsh Island 73 fields from privately-held ANKOR E&P Holdings Corporation and KOA Energy LP. After normal and customary post-effective date adjustments to reflect an effective date of July 1, 2021, cash consideration of approximately $30.2 million was paid to the sellers using cash on hand.

EOG Resources Inc. anticipates Q4 net gain of $136M on mark-to-market of financial commodity derivative contracts.

CANADIAN E&PS

No significant news.

OILFIELD SERVICES

US Well Services Inc. reports preliminary Q4 result and announced strategic initiatives. Preliminary Q4 results: Adj EBITDA ($6M) to ($8M), revenue $38-39M vs FactSet $45.5M, capex $9M to $10M. The company's board intends to evaluate a range of capital markets and strategic alternatives to improve Company liquidity and maximize shareholder value, including without limitation, capital equity capital and / or debt capital raises, debt refinancing transactions, asset divestitures, monetization of intellectual property, and mergers, reverse mergers or other business combinations.

DRILLERS

BTIG upgraded Valaris to Buy from Neutral.

REFINERS

CVR Energy Inc. discloses appointment of Michael Wright as EVP and COO. Wright most recently served as Vice President of Capital Projects within the company.

Delek US Holdings issued the following statement regarding the nomination by IEP Energy Holding LLC, a company controlled by Carl Icahn, of three candidates for election to the Delek US Board of Directors at the Company's 2022 Annual Meeting of Stockholders: “The Nominating and Corporate Governance Committee of the Company's Board will evaluate the nominees and make a recommendation to the Board of Directors, which will make its recommendation to stockholders. Delek US stockholders are not required to take any action at this time.”

Marathon Petroleum reported net income of $774 million, or $1.27 per diluted share, for the fourth quarter of 2021, compared with net income of $285 million, or $0.44 per diluted share, for the fourth quarter of 2020. Adjusted net income was $794 million, or $1.30 per diluted share, for the fourth quarter of 2021. This compares to an adjusted net loss of $608 million, or $(0.94) per diluted share, for the fourth quarter of 2020. Additionally, the company announced that its board of directors has approved an incremental $5 billion share repurchase authorization.

MLPS & PIPELINES

Bloomberg reported that Vistra Corp., one of the largest power generators in Texas, accused units of Energy Transfer LP of levying additional charges to deliver natural gas to profit from rising demand ahead of a looming winter storm.

Magellan Midstream Partners, L.P. reported net income of $244 million for fourth quarter 2021 compared to $184 million for fourth quarter 2020. Diluted net income per common unit was $1.14 in fourth quarter 2021 and 82 cents in fourth quarter 2020. Diluted net income per unit excluding mark-to-market (MTM) commodity-related pricing adjustments, a non-generally accepted accounting principles (non-GAAP) financial measure, was $1.24 for fourth quarter 2021, which exceeded the $1.10 guidance provided by management in early November. Actual results benefited from additional refined products shipments, lower-than-expected expenses and improved commodity prices.

MPLX LP reported fourth-quarter 2021 net income attributable to MPLX of $830 million, compared to $691 million for the fourth quarter of 2020. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) attributable to MPLX was $1,445 million, compared with $1,355 million in the fourth quarter of 2020.

In reference to its program to adjust its fleet, Nordic American Tankers announced that it has now sold one more Suezmax under the program. The 2002 built “Nordic Mistral” has been sold. This transaction is fixed and firm. The vessel is planned for delivery to the new owner later in February. A price of about $30 million has been achieved in total for these two vessels, reflecting their quality and strengthening NAT.

Sunoco LP was downgraded to neutral from buy on valuation. Target to $49 from $44.

Tellurian Inc. to start building LNG Driftwood plant in April.

MARKET COMMENTARY

U.S. stock index futures rose, with Nasdaq 100 futures jumping over 1% following strong results from Alphabet and Advanced Micro Devices. Meta Platforms and Qualcomm are among the companies expected to report results after markets close. Earnings boost helped European shares move up, outweighing concerns surrounding interest rate hikes from key central banks. Japanese shares ended higher, taking cues from an overnight Wall Street rally. Improved risk sentiment hit the dollar, strengthening the euro and gold. Oil prices edged lower as investors remained cautious ahead of an OPEC+ meeting later in the day.


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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