Crude on Course for Second Weekly Fall as More Countries Join Reserves Release
The energy sector is poised for a higher start, supported by strength in the crude complex and major market indices. U.S. equity futures edged higher, snapping a two day slide, despite concerns around aggressive moves by the Federal Reserve to tame inflation and the ongoing Ukraine conflict.
WTI and Brent crude oil futures are up in early trading but remained on course for a second weekly fall after countries announced plans to release crude from their strategic stocks. The IEA has listed members' contributions to a 120-million-barrel release of crude and oil products from emergency stockpiles aimed at cooling global oil prices following Russia's invasion of Ukraine. The release of stocks by the U.S.-allied members of the IEA would be their second coordinated release in a month and the fifth in the agency's history. The United States will match the 60 million barrels tapped by other IEA countries as part of its 180-million-barrel draw from the U.S. Strategic Petroleum Reserve announced in March. The total release of 240 million barrels will be made available to the within six months. Record volumes of fuel oil from Latin America landed in the United States in March as refiners snapped up alternatives to Russian feedstocks ahead of Washington's April 22 deadline to end U.S. imports of Russian oil. Russia's share fell to 20% last month while Latin American countries - driven mainly by Mexico - provided 35% of imports of fuel oil, blendstock for fuel oil and vacuum gasoil, up from 20% last year.
Natural gas futures ticked higher as NOAA's 6-10 day outlook shows below-normal temps over the western and central US, with above normal temps likely for most of the eastern US and along the Gulf Coast.
BY SECTOR:
US INTEGRATEDS
The chair of the ad-hoc board of Venezuela's state-owned oil company PDVSA, which controls some of its most important foreign assets, said it was very likely that Washington will extend Chevron's license to operate in the South American country.
INTERNATIONAL INTEGRATEDS
Eni and the Government of Rwanda signed a Memorandum of Understanding (MoU) to identify collaborative opportunities in the areas of circular economy, agriculture, forestry, innovation, and digital information technology. Under the terms of the MoU, the two parties will evaluate the feasibility of circular economy projects focused on collecting used cooking oil and waste oils, waste management valorisation and recycling. The fields of interest also include agriculture, especially bio-feedstock production, and the transformation into decarbonised products. This is in addition to forestry, especially forest conservation and generation of carbon credits through a wide range of initiatives, such as reducing CO2 emissions from the wood-fuel value chain and other service activities.
Equinor warned that its first quarter results would be negatively impacted by between $400 million and $500 million from trade in natural gas derivatives used to hedge its physical deliveries.
Prosafe has been declared the winner of a bidding process for a four-year contract by Petrobras for the provision of the Safe Notos semi-submersible vessel for safety and maintenance support offshore Brazil. However, a potential contract award and timing of the contract award are subject to a formal process during which other bidders may appeal within the next week or so.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
Reuters reported that ConocoPhillips is working with an adviser to sell some of its Eagle Ford basin assets in Texas worth around $100 million, as it steps up divestitures to benefit from higher energy prices.
Truist Securities initiated coverage on Crescent Point Energy with a Buy rating.
Earthstone Energy announced that its subsidiary, Earthstone Energy Holdings, LLC, has priced the previously announced private offering of $550 million aggregate principal amount of 8.0% senior unsecured notes due 2027.
As per SEC filing, on April 1, 2022, Ovintiv entered into an amended and restated credit agreement dated as of April 1, 2022, between Ovintiv, as borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, and the initial lenders and initial issuing banks named therein, amending and restating that certain credit agreement, dated as of January 27, 2020, between Ovintiv, as Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, and the initial lenders and initial issuing banks named therein. The U.S. Credit Agreement provides for total revolving commitments of $2.2 billion, with a termination date of July 15, 2026, unless the date of termination is extended pursuant to the terms of the agreement. On April 1, 2022, the Canadian Subsidiary entered into an amended and restated credit agreement dated as of April 1, 2022, among the Canadian Subsidiary, as borrower, Ovintiv, as guarantor, the financial institutions party thereto, as lenders, and Royal Bank of Canada, as agent, amending and restating that certain credit agreement, dated as of January 27, 2020, among the Canadian Subsidiary, as borrower, Ovintiv, as guarantor, the financial institutions party thereto, as lenders, and Royal Bank of Canada, as agent. The Canadian Credit Agreement provides for total revolving commitments of $1.3 billion, with a maturity date of July 15, 2026, unless the maturity date is extended pursuant to the terms thereof.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
No significant news.
DRILLERS
No significant news.
REFINERS
No significant news.
MLPS & PIPELINES
Enterprise Products Partners L.P. announced that the board of directors of its general partner declared the quarterly cash distribution paid to limited partners holding Enterprise common units with respect to the first quarter of 2022 of $0.465 per unit, or $1.86 per unit on an annualized basis. The quarterly distribution will be paid Thursday, May 12, 2022, to common unitholders of record as of the close of business Friday, April 29, 2022. This distribution represents a 3.3 percent increase over the distribution declared with respect to the first quarter of 2021.
TC Energy launched an open season to solicit binding commitments for crude oil transportation services on the Marketlink Pipeline System with origin in Cushing, OK, and destinations in Port Arthur and Houston, TX.
MARKET COMMENTARY
U.S. stock index futures were higher, though gains were limited as the prospect of aggressive global rate hikes and geopolitical risks weighed on sentiment. European shares rallied as investors focused on the French presidential elections over the weekend. Asian equities ended in the green. The dollar index touched 100 for the first time in nearly two years, while gold was in the negative territory. Oil prices were down amid stockpile releases by countries.
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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