The energy sector is poised for a higher start, backed by further strength in the crude complex and in the major equity futures which rebounded from three-days of steep declines on reports that the U.S. and China were moving closer to agreeing on the amount of tariffs that would be rolled back in a so-called phase-one trade deal. Disappointing domestic jobs data however is keeping a cap on gains.
WTI and Brent crude oil futures extended their trend higher for the third-straight session and are up over 1.5% so far this morning, lifted by optimism ahead of the OPEC meeting, last night’s API report and positive U.S.-China trade headlines. Ahead of Thursday’s announcement, Iraqi’s oil minister told reporters in Vienna on Tuesday that “a deeper cut is being preferred by a number of key members”, lifting hopes of a further drop in output by OPEC+. There is however lingering market skepticisms over deepening of cuts, though it is widely accepted that the producer group is keen to support prices and will likely extend the existing supply pact. Last night’s API report showed U.S. crude oil inventories fell more than expected last week, dropping by 3.7 million barrels or more than double the expected 1.7 million barrels. Traders will be looking to the EIA report later this morning as the next major catalyst.
Natural gas futures dipped lower after yesterday’s rally, sliding ahead of tomorrow’s storage report which analysts are looking for a draw of 22 Bcf vs the 5 yr average of 41 Bcf and 62 Bcf last year.
Reuters - ExxonMobil said that it has completed maintenance work at its Singapore chemical plant. A company spokesman declined to provide further details of the affected units, saying that it was not the company's practice to discuss operational details of its units.
(Late Tuesday) Reuters - Petroleo Brasileiro SA Petrobras said it is working on an additional share offering to reduce its minority stake in its fuel distribution unit. Petrobras confirmed it is working on a share offering of its unit after newspaper Valor Economico reported that the company's chief executive officer, Roberto Castello Branco, told investors in New York about the plan.
Reuters - Total and shipping company CMA CGM said they had signed an agreement for the supply of liquefied natural gas over 10 years. Under the agreement, Total will supply to CMA CGM around 270,000 tonnes of liquefied natural gas per year.
Reuters - Total and Japanese company Mitsui O.S.K. Lines said they had signed a contract to build a second liquefied natural gas (LNG) bunker vessel. Total and Mitsui O.S.K. Lines said the new vessel would be delivered in 2021 and would be positioned in the Marseille-Fos area in France.
Press Release - Chesapeake Energy announced that it has commenced a tender offer, on behalf of Brazos Valley Longhorn, L.L.C. and Brazos Valley Longhorn Finance Corp., each wholly owned subsidiaries of Chesapeake, to purchase for cash any and all of the outstanding 6.875% Senior Notes due 2025 issued by the Issuers.
Press Release - Chesapeake Energy announced the commencement of private offers of up to $1,500,000,000 aggregate principal amount of its new 11.5% Senior Secured Second Lien Notes due 2025 in exchange for certain outstanding senior unsecured notes issued by the Company, upon the terms and subject to the conditions set forth in the Company's confidential offering memorandum and the related letter of transmittal, each dated December 4, 2019.
(Late Tuesday) Press Release - QEP Resources announced that the deadline for its current solicitations of consents from holders of its outstanding senior notes, currently set to expire at 5:00 p.m., New York City time, on December 3, 2019, has been extended until 5:00 p.m., New York City time, December 9, 2019 to allow more opportunity for holders of the Notes to submit consents to the proposed amendments to the indentures relating to such Notes.
Press Release - Canadian Natural Resources announced that the company’s 2020 capital budget is targeted to be $4.05 billion, of which approximately $1.55 billion is allocated to conventional and unconventional assets and approximately $2.5 billion is allocated to Long Life Low Decline assets. Overall, production in 2020 is targeted to be between 1,137,000 BOE/d and 1,207,000 BOE/d, with a product mix of approximately 80% crude oil, Synthetic Crude Oil and NGLs and approximately 20% natural gas. These targeted 2020 volumes assume that the Alberta government curtailment program will continue throughout 2020, and as a result 2020 targeted production is 10,000 bbl/d to 25,000 bbl/d less than it would have been without the curtailment program.
Press Release - KBR has secured a contract for its ammonia synthesis technology from Wuhuan Engineering Co., Ltd. (WUHUAN), a leading Chinese EPC Contractor, for the Talcher fertilizer unit as part of a benchmark coal-to-urea project in India. Under the terms of the contract, KBR will provide License and Basic Engineering Design (LBED), catalyst, and proprietary process equipment for the plant, based on KBR's highly efficient ammonia synthesis technology.
Press Release - Patterson-UTI Energy reported that for the month of November 2019, the Company had an average of 119 drilling rigs operating. For the two months ended November 30, 2019, the Company had an average of 123 drilling rigs operating.
MLPS & PIPELINES
(Late Tuesday) Press Release - Energy Transfer announced that a comprehensive commercial tender package has been issued to engineering, procurement and construction (EPC) contractors to submit final commercial bids for the proposed Lake Charles LNG liquefaction project being developed by Energy Transfer and Shell US LNG, LLC (Shell). The project, if sanctioned by Energy Transfer and Shell, would modify Energy Transfer’s existing LNG import facility located in Lake Charles, Louisiana to add LNG liquefaction capacity of 16.45 million tonnes per annum (MTPA) for export to global markets. The commercial bids are expected to be received in the second quarter of 2020.
(Late Tuesday) Press Release - US Development Group, LLC (through a wholly-owned affiliate, collectively USD) and Gibson Energy jointly announced an agreement to construct and operate a diluent recovery unit (DRU) near Hardisty, Alberta, Canada. ConocoPhillips Canada has contracted to process 50,000 barrels per day of inlet bitumen blend through the DRU to be shipped by Canadian Pacific and Kansas City Southern Railway Company to the U.S. Gulf Coast. USD and Gibson are currently in commercial discussions with other potential producer and refiner customers to secure long-term, take-or-pay agreements for an additional 50,000 barrels per day at the proposed DRU.
RBC Capital Markets upgraded Gibson Energy to ‘Outperform’ from ‘Sector Perform.’
Wall Street futures and European stocks rose as a report that Beijing and Washington were moving closer to a phase-one trade deal offset fears about a possible delay in resolving their prolonged dispute. Asian shares ended in the red. The dollar was little changed and gold prices slipped. Oil gained ahead of this week’s OPEC meet, which is likely to extend production cuts.
NASDAQ ENERGY TEAM THOUGHT LEADERSHIP
- 9/17/19 - Oil's New Risk Premium Discussion on CNBC TV
- 9/16/19 - Discussion on Bloomberg TV about Impact of Abqaiq Attack
- 7/1/19 - OPEC meeting discussion with CNBC TV
- 7/1/19 - Oil Market Geopolitics with Bloomberg TV
- 5/23/19 - Oil's New Bear Market Discussion with Bloomberg TV
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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