Energy stocks are set to open higher for the second straight session, supported by gains in the underlying commodities and broader index futures as the S&P 500 extends its record setting run. Optimism comes as the number of newly confirmed COVID-19 infections in the U.S. has dropped. Elsewhere, U.S. and Chinese trade officials have reaffirmed their commitment to a Phase 1 trade deal, giving a further boost to the markets.
In company news, ExxonMobil shares are off about 1.5% in early trading following last night’s headlines that the company will be removed from the Dow Jones effective before the open on Monday. The moves were spurred by Apple’s decision to split its stock, which cuts the Dow’s weight in the Information Technology sector. Furthermore, Pioneer Natural Resources Co and Parsley Energy are planning to trim staff in coming days, people familiar with the matter said, after each posted large second-quarter losses.
Oil prices are higher this morning as tropical storm Laura is expected to strengthen into a hurricane with winds potentially reaching 115 mph when it hits late Wednesday or early Thursday morning. Bloomberg reported over 1M bpd of refining capacity could be shut-in before the storm threat passes. "Overall, hurricanes may be limiting supply this week, helping prices maintain and even slightly hike their levels, but the market will soon again focus on the biggest hurricane of them all, COVID-19," Bjonar Tonhaugen, head of oil markets at Rystad Energy, said.
Natural gas futures are slightly higher with the September contract expiring Thursday. LNG feedgas flows are expected to slow today, driven by declines at Cameron and Sabine Pass ahead of Laura.
Reuters - Exxon Mobil cut production at its 369,024 barrel per day (bpd) refinery in Beaumont, Texas, to minimum rates overnight ahead of a possible shutdown starting as early as Tuesday ahead of Tropical Storm Laura.
(Late Monday) Reuters - Petrobras has initiated the sale process for a group of 26 onshore and shallow water oilfields and a small nearby refinery in the northeastern part of the country known as Polo Potiguar.
(Late Monday) Reuters - Total SA plans to shut its 225,500 barrel-per-day (bpd) Port Arthur, Texas, refinery on Tuesday ahead of tropical storm Laura's arrival in the area on Thursday. Total cut production to about 50% of capacity on Monday in anticipation of a possible shutdown, the sources said. Late Monday, after a shift further west in Laura's forecast track, the company decided to idle the refinery.
(Late Monday) Press Release - Antero Resources announced that as of 5:00 p.m., New York City time, on August 24, 2020, $88,389,000 aggregate principal amount of the Company's 5.125% Senior Notes due 2022 and $95,661,000 aggregate principal amount of the Company's 5.625% Senior Notes due 2023 had been tendered and not withdrawn prior to the Dutch Auction Early Tender Deadline, in accordance with the previously announced cash tender offers for the Dutch Auction Notes on the terms and subject to the conditions set forth in the Offer to Purchase, dated as of August 11, 2020.
Press Release - Seadrill Limited announced its second quarter results for the period ended June 30, 2020. Net loss attributable to shareholders of $181 million, equivalent to net loss per share of $1.80. Revenue down 14% at $277 million due to lower management contract revenues.
(Late Monday) Reuters - Preparing for tropical storm Laura, Phillips 66 began the shutdown on Monday of its Lake Charles manufacturing complex in Louisiana, which includes its 260,000 barrels per day refinery.
MLPS & PIPELINES
(Late Monday) Press Release - Summit Midstream Partners announced that its Board of Directors has appointed James Johnston to serve as Executive Vice President, General Counsel and Chief Compliance Officer of Summit Midstream Partners, LP, effective September 4, 2020. Mr. Johnston joins Summit Midstream Partners from Crestwood Equity Partners, where he most recently served as Senior Vice President and General Counsel.
U.S. stock index futures rose and most Asian shares were higher as U.S.-China officials reaffirmed their commitment to a Phase-1 trade deal, adding to market optimism from signs of progress in developing treatments and vaccines for COVID-19. Smaller-than-expected decline in German economic output fuelled gains in European stocks, with Frankfurt shares hitting a one-month high. Gold prices slipped as a rise in risk sentiment offset support for the metal from a weaker dollar. Oil advanced after Tropical Storms Marco and Laura forced deep U.S. production cuts.
NASDAQ ENERGY TEAM THOUGHT LEADERSHIP
- 1/8/20 – CNBC’s Squawk Alley: Oil market reaction to US-Iran tensions
- 1/8/20 – Bloomberg Day Break – Steady escalation of US-Iran tensions
- 12/5/19 – Bloomberg Balance of Power – OPEC's Limited Efficacy
- 9/17/19 - Oil's New Risk Premium Discussion on CNBC TV
- 9/16/19 - Discussion on Bloomberg TV about Impact of Abqaiq Attack
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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