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Oil

Crude Rises on Record COVID Cases, Increasing Libyan Output

WTI and Brent trade lower as record COVID-19 cases in the US and Europe alongside more oilfield openings in Libya offset pending Gulf of Mexico shut-in's from hurricane Zeta.

SECTOR COMMENTARY 

Energy stocks are poised for sharp declines at the open, pressured by weakness in the crude complex and U.S. stock index futures amid record surges in new COVID-19 cases over the weekend while progress has stalled between Republicans and Democrats on fiscal stimulus measures. Dow futures are pointing to a 350 point decline.

In sector news, Cenovus Energy has agreed to buy rival Husky Energy in an all-stock deal valued at C$3.8 billion ($2.9 billion) to create Canada's No. 3 oil and gas producer, as a pandemic-driven collapse in demand forces the industry to consolidate. In further deal news, Contango Oil & Gas and Mid-Con Energy Partners have entered into an agreement to combine in an all-stock merger transaction.

WTI and Brent trade lower as record COVID-19 cases in the US and Europe alongside more oilfield openings in Libya offset pending Gulf of Mexico shut-in's from hurricane Zeta. “In an environment where there are renewed worries over the demand outlook, the last thing the market needs right now is additional supply,” said Warren Patterson, ING’s head of commodities strategy.

Natural gas futures bucked the trend and are up about 2% with the November contract expiring on Wednesday. Estimates for LNG feedgas flows had volumes moving above 9.0 Bcf/d this weekend to their best levels since late-March, led higher by Sabine Pass. Forecasts 6-14 days out last night turned warmer, specifically the 8-14 day which expects above-seasonal temperatures for the vast majority of the L48.

U.S.INTEGRATEDS 

Reuters - After years of focusing on U.S. shale, Chevron is staking its natural gas future on the Middle East, a volatile and divided region where energy majors have long tread warily.

Reuters - Chevron said on Sunday it has begun evacuating all non-essential personnel from its Gulf of Mexico facilities ahead of Tropical Storm Zeta.

INTERNATIONAL INTEGRATEDS 

Reuters - BP on Sunday said it has begun to evacuate four offshore U.S. Gulf of Mexico oil platforms and secure facilities as Tropical Storm Zeta sprang up in the Caribbean Sea.

Press Release - ChargeUp Europe is delighted to announce its latest member, broad energy company TOTAL.

CANADIAN INTEGRATEDS 

Credit Suisse downgraded Cenovus Energy to ‘Neutral’ from ‘Outperform’.

Press Release - Cenovus Energy and Husky Energy announced a transaction to create a new integrated Canadian oil and natural gas company with an advantaged upstream and downstream portfolio that is expected to provide enhanced free funds flow generation and superior return opportunities for investors. The companies have entered into a definitive arrangement agreement under which Cenovus and Husky will combine in an all-stock transaction valued at $23.6 billion, inclusive of debt. The combined company will operate as Cenovus Energy Inc. and remain headquartered in Calgary, Alberta. The transaction has been unanimously approved by the Boards of Directors of Cenovus and Husky and is expected to close in the first quarter of 2021.

Reuters - Cenovus Energy has agreed to buy rival Husky Energy in an all-stock deal valued at C$3.8 billion ($2.9 billion) to create Canada's No. 3 oil and gas producer, as a pandemic-driven collapse in demand forces the industry to consolidate.

Raymond James upgraded Husky Energy to ‘Market Perform’ from ‘Underperform’.

U.S. E&PS  

(GLOBE NEWSWIRE) – Contango Oil & Gas Company and Mid-Con Energy Partners, LP today announced they have entered into an agreement to combine in an all-stock merger transaction. The combination continues Contango’s consolidation strategy, increases its exposure to oil reserves at an attractive price, increases corporate margins via scale and further cost rationalization, and amplifies Contango’s ability to play offense amid the dislocation in the sector, while providing Mid-Con’s unitholders with greater liquidity, financial stability and opportunities for growth on a larger platform.

CANADIAN E&PS 

CIBC initiated coverage in Ovintiv with an ‘Underperform’ rating.

OILFIELD SERVICES 

Zephirin upgraded Baker Hughes, Halliburton and Schlumberger to ‘Buy’ from ‘Hold’.

Press Release - KBR was awarded an $88 million task order to provide sustainment engineering for the F-16 Fighting Falcon – a proven, highly maneuverable multi-role fighter aircraft for the U.S. and allied nations – in support of the Air Force Life Cycle Management Center (AFLCMC). KBR will also provide support to the A-10 Thunderbolt II and T-38 Talon aircraft. This work is expected to be performed over a five-year period in Clearfield, Utah.

SEC filing - On October 23, 2020, the Board of Directors of Natural Gas Services Group authorized the Company to enter into a share repurchase program for the purchase of up to an aggregate amount of $10 million of the Company’s common stock in accordance with the guidelines specified under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.

SocGen upgraded TechnipFMC to ‘Buy’ from ‘Hold’.

MARKET COMMENTARY

Wall Street futures fell, tracking global equities, as rising coronavirus cases in the United States and Europe, and a stalemate in Washington over the stimulus package hurt investor sentiment. The dollar gained against a basket of currencies, while gold prices were little changed. Oil prices were in the negative territory, pressured by Libya's increasing production. The U.S. new home sales and building permit numbers are on the economic radar.

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


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