Oil
Oil

Crude Steadies as Traders Question Reserve Release

The energy sector is poised for a lower start after yesterday’s rally amid weakness in the crude complex and pressure in the major equity futures which fell this morning ahead of a slew of economic data releases, with investors nervous about inflation and interest rate hikes.

SECTOR COMMENTARY: 

The energy sector is poised for a lower start, pulling back from yesterday’s rally amid mild weakness in the crude complex and pressure in the major equity futures which fell this morning ahead of a slew of economic data releases, with investors nervous about inflation and prospects for faster interest rate hikes heading into the Thanksgiving holiday.

WTI and Brent crude oil futures inched lower this morning, steadying after yesterday’s jump as investors questioned the effectiveness of a U.S.-led release of oil from strategic reserves and turned their focus to how producers will respond. Analysts expect the effect on prices to be short-lived after years of declining investment and a strong global recovery from the COVID-19 pandemic but the markets are looking at how OPEC+ will react to the joint reserve release when they meet on Dec. 2 to discuss policy. Ahead of the official EIA data later today, traders are also digesting last night’s API report which should showed surprise builds in U.S. crude and gasoline stocks.

Natural gas futures erased earlier declines and are currently up over 0.6% in early trading, building to yesterday’s rally amid soaring global gas prices the is expected to keep demand for U.S. LNG exports near record highs and cooler weather in key consuming regions.

BY SECTOR:

US INTEGRATEDS

RBC Capital Markets upgraded Chevron to Outperform from Sector Perform.

INTERNATIONAL INTEGRATEDS

The Nigerian subsidiary of Royal Dutch Shell, SPDC, lifted force majeure on Bonny Light crude oil loadings on Monday, a spokesperson said on Wednesday.

Shell said it had signed a deal to purchase power from a development dubbed “the world’s largest offshore wind farm.” The 15-year power purchase agreement relates to 240 megawatts from Dogger Bank C, the third and final phase of the 3.6 gigawatt Dogger Bank Wind Farm, which will be located in waters off the coast of northeast England.

CANADIAN INTEGRATEDS

No significant news.                       

U.S. E&PS

No significant news.

CANADIAN E&PS

No significant news.

OILFIELD SERVICES

Fluor announced that three of its Advanced Technologies & Life Sciences projects were recognized with 2021 awards of excellence by the Construction Users Roundtable (CURT) at its annual awards gala in Cape Coral, Florida.

DRILLERS

No significant news.

REFINERS

A fire broke out Tuesday morning at a gasoline producing unit of PBF Energy's170,000 barrel per day Toledo, Ohio refinery, according to the company. Refinery crews are actively responding with assistance from the local Oregon, Ohio Fire Department, a spokesperson for PBF Energy said. There have been no injuries reported, the spokesperson added.

MLPS & PIPELINES

Cheniere Energy announced that its subsidiary, Cheniere Marketing International, LLP, has entered into a binding 20-year liquefied natural gas sale and purchase agreement with Foran Energy Group Co., Ltd. The SPA follows a Heads of Agreement signed between subsidiaries of Cheniere and Foran in November of 2020.

Nordic American Tankers reported the third quarter of 2021 produced a net loss of -$44.7 million or an earnings per share (EPS) of -$0.27. Adjusted for an impairment of $8.4 million (non-cash) the net loss was -$36.3 million and adjusted EPS of -$0.22. This compares to the previous quarter, that came in at a net loss of -$28.7 million or an EPS of -$0.18.

MARKET COMMENTARY

U.S. stock index futures fell ahead of a slew of economic data releases, with investors nervous about inflation and prospects for faster interest rate hikes heading into the Thanksgiving holiday. Shares in Europe mostly pared gains on fears around worsening COVID-19 situation and the prospect of severe restrictions. China stocks closed up as food and beverage shares and coal miners gained, while Japan's Nikkei ended lower as growth-oriented stocks took a beating. In currencies, the euro fell after a survey showed German business morale deteriorated in November. The dollar index rose ahead of minutes of the November FOMC meeting. Gold prices were little changed, with investors refraining from making big bets. Oil prices were steady as investors questioned the effectiveness of a U.S.-led release of oil from strategic reserves and turned their focus to how producers will respond.


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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