Oil pumpjacks in a desert landscape
Oil

Crude Surges as Number of New Coronavirus Cases Slows

Oil futures on both sides of the Atlantic are recovering from their lowest closing levels in over a year as the number of new coronavirus cases slowed in China, easing some concerns about lengthy destruction of oil demand which prompting short covering.

SECTOR COMMENTARY

Energy stocks are set for a rebound this morning, backed by gains in the underlying commodities and broader index futures which are set to extend their record rally as investors shrugged off concerns over the economic impact of the coronavirus outbreak. Sector news is relatively quiet while macro headlines continue to dictate equity prices.

Oil futures on both sides of the Atlantic are recovering from their lowest closing levels in over a year as the number of new coronavirus cases slowed in China, easing some concerns about lengthy destruction of oil demand which prompting short covering. "The bottom seems to be in place for oil prices," said Edward Moya, analyst at brokerage OANDA. "It is way too early to be confident that peak of the virus will happen this month, but optimism is growing that we could see Beijing resume some normalcy in travel and trade outside of the Hubei province." Traders will be looking ahead to the weekly API data report released later this evening as the next catalyst for prices.

Natural gas futures are up ~0.5%, off 3.5 year lows, backed by gains in the crude complex and as updated weather models turned seasonal for most of the East.

U.S. INTEGRATEDS

(Late Monday) Press Release - Authorities are investigating flaring from Chevron's Richmond refinery on February 10. The Governor's Office of Emergency Services received a report at 4:43 a.m. about "an unknown amount of hydrogen sulfide into the air from a flare" at the refinery. The flaring was apparently due to a "process upset" in a unit at the refinery, and caused precautionary evacuations from part of the site, the report to the state office said.

INTERNATIONAL INTEGRATEDS                                            

(Late Monday) Press Release - Oceaneering International announced the award by units of BP, of a contract to provide comprehensive riserless light well intervention (RLWI) services offshore Angola in Blocks 18 and 31.  The value of this meaningful award is reflected in our December 31, 2019 Subsea Products backlog. In connection with this contract, Oceaneering has agreed to provide personnel and equipment related to its RLWI services, remotely operated vehicles, survey services, and communication services integrated onto a chartered multi-purpose vessel.

(Late Monday) Press Release - Petrobras reported that it has started the opportunity disclosure stage (teaser), regarding the sale of all its equity stake in its Nitrogen Fertilizer Unit III.

Press Release - Total said it has entered the Spanish solar market with two deals for the development of projects with a combined capacity of about 2 GW. The first deal was announced by Madrid-based solar developer Powertis SA last week and Total gave more details today. As part of the agreement, Total Solar International and Powertis are to form a joint venture (JV), in which Total will own 65% and Powertis the remaining 35%. According to Total's statement, the Spanish company will bring to the partnership an initial pipeline of projects with a total capacity of 800 MW, while the JV will develop more projects in the future. The projects will be developed by Powertis and Total will have the right to buy them until February 2021. As part of the second deal, Total Solar has agreed to purchase a portfolio of solar projects with a total capacity of up to 1.2 GW from Spanish firm Solarbay Renewable Energy. The projects will be located in the regions of Andalusia, Aragon and Castile-La Mancha. The first projects from the two portfolios are expected to be operational by the end of the year, while the goal is for all projects to be in operation in 2023, according to the statement. Total will pay success fees to Solarbay and Powertis when certain development milestones are reached, it noted.

U.S. E&PS

Capital One Securities initiated coverage of ConocoPhillips at ‘Overweight’.

Simmons Energy downgraded Gulfport Energy and Range Resources to ‘Neutral’ from ‘Overweight’.

(Reuters) - Occidental said on Tuesday it expects to record about $1 billion in charges in the fourth quarter related to the company's investment in Western Midstream Partners LP. The oil and gas producer said in early January that it would cut its majority stake in pipeline operator Western Midstream to less than 50% in 2020, as it seeks to reduce its debt that ballooned with the Anadarko deal. Occidental also expects to report production from continuing operations of 1.402 million barrels of oil equivalent per day for the fourth quarter of 2019.

OILFIELD SERVICES

Press Release - KBR announced it has been awarded a $400 million contract by NASA to provide intelligent systems research and development support services at the agency's Ames Research Center in Silicon Valley.

(Late Monday) Press Release - Oceaneering International announced the award by units of BP, of a contract to provide comprehensive riserless light well intervention (RLWI) services offshore Angola in Blocks 18 and 31.  The value of this meaningful award is reflected in our December 31, 2019 Subsea Products backlog. In connection with this contract, Oceaneering has agreed to provide personnel and equipment related to its RLWI services, remotely operated vehicles, survey services, and communication services integrated onto a chartered multi-purpose vessel.

(Late Monday) Press Release - TechnipFMC announced a preliminary financial update in advance of the Company’s fourth quarter 2019 earnings release scheduled for Wednesday, February 26, 2020. The Company anticipates segment results for the full year 2019 to be as follows: Total Company revenues approaching the guidance mid-point of $13.5 billion. Adjusted EBITDA margin1 for all segments to meet or exceed guidance of at least 11.5% for Subsea, 16.5% for Onshore/Offshore, and 10% for Surface Technologies. Corporate expense, net1, in-line with guidance of $210 – 215 million, excluding impact of foreign currency fluctuations. The Company expects approximately $2.4 billion of non-cash asset impairment charges to impact results in the fourth quarter.

(Late Monday) Press Release - U.S. Silica Holdings announced that its Board of Directors has elected to reduce the Company's quarterly cash dividend to $0.02 per common share from the current quarterly cash dividend of $0.0625 per common share. The dividend is payable April 3, 2020 to shareholders of record as of March 13, 2020.

REFINERS 

Raymond James upgraded Calumet Specialty Products to ‘Market Perform’ from ‘Underperform’.

MLPS & PIPELINES

(Late Monday) - (GLOBE NEWSWIRE) – Green Plains Partners announced financial and operating results for the fourth quarter of 2019. Net income was $10.4 million, or $0.44 per common unit, for the fourth quarter of 2019 compared with $14.1 million, or $0.51 per common unit, for the same period in 2018. The partnership reported adjusted EBITDA of $13.3 million and distributable cash flow of $11.2 million for the fourth quarter of 2019, compared with adjusted EBITDA of $15.2 million and distributable cash flow of $13.1 million for the same period in 2018. Distribution coverage was 0.99x and 1.00x, respectively, for the three months and trailing twelve months ended December 31, 2019. Differences in the comparative results of fourth quarter 2019 and fourth quarter of 2018 were mainly driven by our parent’s sale of three ethanol plants in the fourth quarter of 2018.

MARKET COMMENTARY

Futures for the Nasdaq and the S&P 500 touched new record highs along with European equities as the number of new coronavirus cases slowed down and China's top medical advisor said the epidemic may plateau in the next few weeks. Asian stocks rallied, even as China's factories struggled to re-open after an extended break. Gold prices fell, as appetite for riskier assets improved. The dollar was little changed. Crude prices jumped, as fears of the virus hitting Chinese demand eased.

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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