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Oil

Crude Oil Futures Rise Despite Unexpected Increase in U.S. Inventories

Oil futures are up over 1.5% in early trading, extending gains from the previous session as improved risk appetite provided support and despite data showing an unexpected rise in U.S. oil inventories last week and a weaker demand outlook due to rising COVID-19 infections.

SECTOR COMMENTARY:

The energy sector is poised for another higher start, backed by further strength across the underlying commodities and in the major equity futures which rose amid another round of upbeat quarterly results and forecasts. 

WTI and Brent crude oil futures are up over 1.5% in early trading, extending gains from the previous session as improved risk appetite provided support and despite data showing an unexpected rise in U.S. oil inventories last week and a weaker demand outlook due to rising COVID-19 infections. Ahead of the official EIA data later today, last night’s API report showed U.S. crude stocks rose by 806,000 barrels and gasoline stocks surged 3.3mm barrels last week. Analysts are expecting the government report to show a 4.5mm barrel draw in crude and over 1mm barrel drop in gasoline.

Natural gas futures continued to build on yesterday’s rally, lifted by forecasts for hotter weather and higher air conditioning demand ov the next two weeks than previously expected.  That increase came despite expectations high prices would cause power generators to burn more coal and less gas to produce electricity.

BY SECTOR: 

US INTEGRATEDS

No significant news. 

INTERNATIONAL INTEGRATEDS  

According to Reuters, Eni and the government of Kenya to promote decarbonization by strengthening cooperation in the sustainable bio-fuel value chain. 

CANADIAN INTEGRATEDS  

No significant news.      

U.S. E&PS  

Truist upgraded Cimarex Energy Co to Buy from Hold

Earthstone Energy announced that it completed the previously announced acquisition of privately held operated assets located in the Midland Basin from Tracker Resource Development III, LLC and an affiliate and from affiliates of Sequel Energy Group LLC, which hold well-bore interests in certain of the producing wells operated by Tracker.  The Company also updated its 2021 guidance, provided an operational update, and provided an estimate of mid-year 2021 proved reserves. The Company estimates its oil and gas sales volumes for the second quarter of 2021 to be approximately 2.07 MMBoe or an average of 22,716 Boe/d (52% oil, 76% liquids).  

CANADIAN E&PS

Vermilion Energy is pleased to announce the appointments of Ms. Manjit Sharma and Ms. Judy Steele to our Board of Directors.

OILFIELD SERVICES  

Baker Hughes announced results for the second quarter of 2021. Revenue for the quarter was $5,142 million, an increase of 8%, sequentially. The increase in revenue was driven by higher volume across all segments.

Goldman Sachs upgraded Halliburton to Buy from Neutral.

BNP Paribas upgraded Halliburton to Neutral from Underperform. 

KBR announced that it has been awarded a nitric acid technology contract by Haifa Group for two of its process plants at Mishor Rotem, Israel. Under the terms of the contract, KBR will provide license, basic engineering design and proprietary equipment for both plants, to deliver a capacity increase of approximately 35 percent at each plant.

DRILLERS  

No significant news.

REFINERS     

No significant news.

MLPS & PIPELINES 

DCP Midstream announced that the board of directors of its general partner declared a second quarter 2021 common unit distribution of $0.39 per unit, or $1.56 per unit on an annualized basis. This quarterly common unit distribution will be paid August 13, 2021 to common unitholders of record at the close of business on July 30, 2021. In addition, the board of directors declared a quarterly Series B preferred unit distribution of $0.4922 per unit. This preferred unit cash distribution will be paid September 15, 2021 to preferred unitholders of record at the close of business on September 1, 2021. The board of directors also declared a quarterly Series C preferred unit distribution of $0.4969 per unit. This preferred unit cash distribution will be paid October 15, 2021 to preferred unitholders of record at the close of business on October 1, 2021.

Phillips 66 Partners LP announced that the board of directors of its general partner declared a second-quarter 2021 cash distribution of $0.875 per common unit, or $3.50 per unit on an annualized basis. The quarterly distribution is payable Aug. 13, 2021, to unitholders of record as of July 30, 2021.

Western Midstream Partners announced that the board of directors of its general partner declared a quarterly cash distribution of $0.319 per unit for the second quarter of 2021. This distribution represents a 1.3-percent increase over the prior quarter's distribution and is consistent with an annualized distribution growth of 5-percent.

MARKET COMMENTARY

U.S. stock index futures rose after upbeat quarterly results and forecasts from companies including Johnson & Johnson and Harley Davidson. A slew of upbeat updates from blue-chip firms helped European shares rise. Japan's Nikkei ended higher, as investors bought stocks on dips over cautious earnings optimism ahead of a long weekend that will mark the start of the Tokyo 2020 Olympics. Gold prices eased as a stronger dollar contended with the metal's safe-haven status amid worries of a pandemic resurgence. Oil prices rose as improved risk appetite provided support.

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


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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