Oil pipes and machines out in a desert
Oil

Crude Steadies as OPEC Likely to Maintain Production Cuts

WTI and Brent futures rose more than $1 a barrel after OPEC indicated it was likely to maintain production cuts that have helped boost prices this year, while escalating Middle East tensions provided further support.

SECTOR COMMENTARY

The energy sector is poised for a mixed to lower start, pressured by lower broader equity futures which declined as concerns about an intensifying fallout from a U.S. crackdown on Huawei weighed on market sentiment and oil prices turned negative after touching multi-week highs overnight.

Oil prices have seesawed this morning and are well off overnight highs as investor sentiment declined on concerns over the U.S.-China trade dispute. Earlier WTI and Brent futures rose more than $1 a barrel after OPEC indicated it was likely to maintain production cuts that have helped boost prices this year, while escalating Middle East tensions provided further support. Saudi Energy Minister Khalid al-Falih said on Sunday there was consensus among OPEC and allied oil producers to drive down crude inventories "gently" but he would remain responsive to the needs of a "fragile market".

Natural gas futures are higher in early trade, and marking a new one-month high. Future rose on cooler weather across the southwest in the coming week, while the southeast remains well above seasonal temperatures.

U.S. INTEGRATEDS

(Saturday) Reuters - Exxon Mobil has evacuated all its foreign staff members out of Iraq's West Qurna 1 oilfield and is flying them out to Dubai. Production at the oilfield was not affected by the evacuation and work there is under way normally and being undertaken by Iraqi engineers, Iraqi oil officials said.

INTERNATIONAL INTEGRATEDS

Reuters - Greenpeace activists blocked the entrance to BP headquarters in London, demanding the end to all new oil and gas exploration. Greenpeace activists arrived at BP in St James’ Square at 0200 GMT and encased themselves in specially designed containers to block all the building's main entrances. A team of climbers abseiled from the top of the building.

Reuters - Eni awarded a high potential exploration block in Argentina's offshore. Argentinian authorities officially awarded the exploration license of offshore block MLO 124 to an Eni-led consortium. Eni holds 80% working interest and is operator of a consortium, which also includes Tecpetrol S.A. and Mitsui & Co. Ltd., with 10% each.

Reuters - Total and ENI have stopped payments to the Russian firms who sold them contaminated oil and said they will only pay when compensation is agreed, trading sources said, upping the stakes in what they say is the worst disruption to Russian oil supply. The French and Italian oil majors told their suppliers, including Russia's Rosneft and Surgut, that they would be ready to make payments when the extent of damages is clear and would pay for clean oil when supplies resume, the sources said.

U.S. E&PS

SunTrust Robinson upgraded Cimarex Energy to ‘Buy’ from ‘Hold.’

Wells Fargo upgraded EOG Resources and EQT to ‘Outperform’ from ‘Market Perform.’

Tudor Pickering Holt downgraded Gulfport Energy to ‘Hold’ from ‘Buy.’

B. Riley FBR initiated coverage in Comstock Resources with ‘Neutral’ Rating.

B. Riley FBR initiated coverage in Goodrich Petroleum with ‘Buy’ Rating.

Press Release - Toby Z. Rice and Derek A. Rice, shareholders of EQT, with an approximately 3% ownership interest, filed a definitive proxy statement and sent a letter to EQT shareholders outlining their comprehensive plan to transform EQT into a modern and efficient energy producer capable of driving improved shareholder returns. Shareholders are urged to vote on the White universal proxy card for the Rice Team’s slate of seven highly qualified nominees for election to EQT’s Board of Directors at the Annual Meeting of Shareholders on July 10.

OILFIELD SERVICES

(Late Friday) Press Release - PGS and TGS announced the Torngat 3D MultiClient project in Offshore East Canada. Torngat 3D will cover approximately 3,287 square kilometers and encompasses sections of the open acreage included in the Labrador South November 2021 bid round. PGS' Ramform Titan will perform the acquisition, utilizing Geostreamer technology. The project is expected to commence in late July 2019. PGS will process the GeoStreamer data.

Barclays downgraded Superior Energy Services to ‘Under Weight’ from ‘Equal Weight.’

(Sunday) Press Release - Toromont Industries announced that Paul R. Jewer (Executive Vice President and Chief Financial Officer of Toromont) has advised Toromont that he intends to retire within two years. In addition to providing a lengthy notice period, Paul has agreed to assist in the transition to a new Chief Financial Officer. A formal process will be conducted to recruit a CFO.

Jefferies dropped coverage of Weatherford International.

MLPS & PIPELINES

(Late Friday) Press Release - Enbridge announced that none of Enbridge's outstanding Cumulative Redeemable Preference Shares, Series R (Series R Shares) will be converted into Cumulative Redeemable Preference Shares, Series S of Enbridge (Series S Shares) on June 1, 2019. After taking into account all conversion notices received from holders of its outstanding Series R Shares by the May 17, 2019 deadline for the conversion of the Series R Shares into Series S Shares, less than the 1,000,000 Series R Shares required to give effect to conversions into Series S Shares were tendered for conversion.

MARKET COMMENTARY

Futures for U.S. stock indexes were lower, along with European shares, on concerns about an escalating fallout from a U.S. crackdown on China's Huawei Technologies. Japan's Nikkei edged up on upbeat economic data, while shares in Mainland China and Hong Kong fell on trade tensions. In currency markets, the Australian dollar rose as investors cheered a shock election win by Prime Minister Scott Morrison's conservative coalition. The dollar index was little changed against a basket of major currencies. Oil rose after OPEC indicated it was likely to maintain production cuts and gold steadied.

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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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