Crude Oil
Oil

Crude Rises on U.S.-China Trade Deal Hopes

Oil prices are up slightly, extending yesterday’s strength, on bullish expectations that China and the US are very close to a phase one deal, and that China is committed to talks for a second and possibly third phase. 

SECTOR COMMENTARY

Energy stock are flat amid moderate gains in oil prices and as broader index futures were little changed as investors digested sharp gains from the previous session that pushed equities to fresh record highs.

Oil prices are up slightly, extending yesterday’s strength, on bullish expectations that China and the US are very close to a phase one deal, and that China is committed to talks for a second and possibly third phase. Crude stockpiles in the United States are expected to have declined by 300,000 barrels last week, according to a Reuters poll of analysts. “Confirmation of a stock draw from the API today and the EIA tomorrow could offer some immediate support to the market, with the last stock drawdown seen in mid-October,” said ING analyst Warren Patterson.

Natural gas prices are extending yesterday’s weakness, down another 2% this morning on warmer than expected weather combined with record high production.

U.S. INTEGRATEDS

Chevron was assumed overweight at Simmons Energy/Piper Jaffray.

Exxon was assumed neutral at Simmons Energy/Piper Jaffray.

INTERNATIONAL INTEGRATEDS

BP was assumed overweight at Simmons Energy/Piper Jaffray.

Reuters - Petroleo Brasileiro SA Petrobras said that talks to sell its fertilizer business to Acron Group ended with no agreement. In a securities filing, the company added it remains committed to divest Araucária Nitrogenados SA (ANSA) and Unidade de Fertilizantes Nitrogenados III (UFN-III), in order to improve its portfolio and capital allocation.

Royal Dutch Shell was assumed neutral at Simmons Energy/Piper Jaffray.

Total was assumed overweight at Simmons Energy/Piper Jaffray.

Reuters - Total's Saft batteries unit wins Birmingham tramway deal.

U.S. E&PS

Cabot Oil & Gas was resumed buy at Citi.

Scotiabank upgraded Chesapeake Energy to ‘Sector Outperform’ from ‘Sector Perform.’

ConocoPhillips was assumed overweight at Simmons Energy/Piper Jaffray.

Press Release - Kosmos Energy announced that it has completed drilling the Resolution exploration well (Kosmos 50%, BP 50%) in the U.S. Gulf of Mexico. Resolution was designed to test an amplitude-supported sub-salt prospect in the underexplored western Garden Banks area. The well encountered reservoir quality sands, however the primary exploration objective proved to be water bearing. The well will now be plugged and abandoned and the well results integrated into the ongoing evaluation of the surrounding area.

Guggenheim Securities initiated coverage of Marathon Oil at ‘Neutral.’

Press Release - Sundance Energy Australia announced that the previously announced scheme of arrangement in relation to the Company’s re-domiciliation from Australia to the United States has been fully implemented. Sundance Energy is now the only shareholder in Sundance and is the ultimate parent company of the Sundance group of companies. Sundance will apply to be removed from the official list of the ASX from close of trading on Wednesday, 27 November 2019.

OILFIELD SERVICES   

(Late Monday) Press Release - Tidewater announced that the Company’s consent solicitation of the holders of its 8.00% Senior Secured Notes due 2022 successfully received the consent of the Holders of a majority of the outstanding principal amount of the Notes on November 22, 2019. The Company also announced that pursuant to the previously announced cash tender offer for up to $125,000,000 aggregate principal amount of the outstanding Notes, approximately $285.5 million in aggregate principal amount of the Notes were validly tendered and not validly withdrawn on or prior to 5:00 p.m., New York City time, on November 22, 2019.

DRILLERS

Press Release - Valaris announced that, in connection with the Board's ongoing refreshment program, Frederick Arnold has been appointed to the Valaris Board of Directors, effective immediately. As a new independent director, Mr. Arnold will serve on the Finance Committee, which was formed to assist in the Board's oversight of the Company's capital structure and financial strategies with the goal of driving long-term value for our shareholders. Mr. Arnold joins Georges Lambert, Paul Rowsey and Charles Szews, who is the committee Chairman.

(Late Monday) Press Release - Valaris announced new contracts and contract extensions, with associated revenue backlog of approximately $285 million, awarded subsequent to a prior fleet status report dated October 25, 2019.

REFINERS

(Late Monday) Press Release - Valero Marketing and Supply de México, S.A. de C.V., a wholly-owned subsidiary of Valero Energy, announced that it has signed long-term agreements for the use of three new refined product terminals located in Guadalajara, Monterrey, and Altamira, Mexico. These terminals will support Valero’s strategy to expand its product supply chain into high growth markets and are expected to start operations in 2021.

MARKET COMMENTARY

U.S. stock index futures were little changed and European shares were slightly lower as investors sought concrete signs of progress in U.S.-China trade talks. In Asia, Hong Kong shares ended lower, while Japan’s Nikkei hit its highest level in more than a year led by electronics part and semiconductor-related stocks. The dollar gave up earlier gains, while gold prices steadied. Oil prices were in the green. U.S. building permits and new home sales numbers are due later in the day.

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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