Crude Slips on Easing Supply Concerns, EU Split on Russian Oil Ban
The energy sector is set for a mixed to lower start pressured by weakness in the underlying commodities, despite Wall Street's main indexes set for a higher open. Investors continued to favor beaten-down growth stocks while grappling with concerns about the Russia-Ukraine conflict and the possibility of bigger interest rate hikes.
WTI and Brent crude oil futures are lower in early trading on some easing supply concerns after a partial export resumption from Kazakhstan's CPC crude terminal, while the European Union remained split on whether to impose an oil embargo on Russia. OPEC sources said the producer group's officials believe that a possible EU ban on Russian oil would hurt consumers and that it had conveyed its concerns to Brussels. Prices were also pressured by the potential for another coordinated release of oil from storage by the United States and its allies to help to calm oil markets. Canada has capacity to increase oil and gas exports by up to 300,000 barrels per day by the end of 2022 to help improve global energy security following Russia's invasion of Ukraine.
Natural gas futures rose as NOAA's 6-10 day outlook projects near- to above-normal temps across much of the west, as well as in the eastern region, with below-normal temps seen for the Central and Southern Rockies, Great Plains and Great Lakes region. For the 8-14 day period, near- to below-normal temps are expected across the central and eastern mainland, while above-normal temps are likely in the West, as well as over the FL Peninsula.
BY SECTOR:
US INTEGRATEDS
Kazakhstan's largest oil venture Tengizchevroil (TCO) is lowering output following unscheduled repair works at an export terminal at the Russian port of Novorossisk on the Black Sea coast, TCO operator Chevron said.
Negotiators for Chevron and the United Steelworkers union (USW) are scheduled to meet next week in an effort to end a strike at a Richmond, California refinery, spokespeople for both sides said.
INTERNATIONAL INTEGRATEDS
bp announced new plans to invest £1 billion in electric vehicle charging in the UK, supercharging the roll-out of fast, convenient charging across the country.
Top Western oil companies face a hit to revenue as disruptions at a Russian Black Sea port force producers to curtail output from Kazakhstan's giant oilfields, highlighting the growing global supply risk after Moscow's invasion of Ukraine. Chevron, Exxon Mobil, Shell, TotalEnergies and Italy's Eni are among international companies with stakes in Kazakhstan's oilfields.
Saipem will launch a 2 billion euro ($2.20 billion) capital increase this year and sell assets to help fund a turnaround plan to take the troubled Italian energy services group back into the black. Saipem, controlled by Eni and state lender CDP, said its two cornerstone investors and banks would advance 1.5 billion euros of the capital increase.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
As per SEC filing, Chesapeake Energy filed a prospectus related to the offering and sale of 9.4 million shares of common stock offered by selling shareholders.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
Compass Minerals announced the appointment of Edward C. Dowling, Jr. to the company’s board of directors.
KBR and ExxonMobil Catalysts and Licensing LLC will collaborate to bring significant advancements to propane dehydrogenation (PDH) technology.
Martin Marietta Materials announced that it has entered into a definitive agreement to sell its Colorado and Central Texas ready mixed concrete operations to Smyrna Ready Mix Concrete LLC.
DRILLERS
The Board of Seadrill announced the appointment of Simon Johnson as President and Chief Executive Officer. Mr. Johnson will replace Stuart Jackson as President and Chief Executive Officer with immediate effect.
REFINERS
No significant news.
MLPS & PIPELINES
No significant news.
MARKET COMMENTARY
Wall Street futures struggled for direction, mirroring European equities, as the escalating Russia-Ukraine conflict kept investors cautious heading into the weekend. Asian shares ended on a mixed note, with Japan's Nikkei rising for a ninth straight session, its longest winning streak since September 2019. The dollar was down as investors priced in the expected monetary tightening from the Federal Reserve. Oil prices slipped, with some supply concerns easing on expectations that crude exports would resume from Kazakhstan's CPC terminal. Gold prices were in the negative territory.
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