Energy Market Commentary February 13, 2017: Nasdaq Advisory Services

The energy sector is posed for a mixed to higher start, supported by continued strength in the broader equity markets while some marginal weakness in the crude complex and a further selloff in natural gas futures weighed. The mixed start comes ahead of a busy week on economic data front including a speech by the Fed Chair, a ramp up in earnings releases from the producers and all on top of the quarterly 13Fs due by end of business tomorrow.

In sector news, Gibsons Energy this morning announced it has entered into an agreement to divest its industrial propane business to Superior Plus for $412 million. While Gibson is indicating a weaker start, Superior is up marginally on the news. Elsewhere, sector and earnings news is light today.

WTI and Brent crude oil futures are down ~0.40% in early trading after last week’s run, pressured by growing evidence that U.S. production is rising but losses were capped by official OPEC production figures showing initial compliance with its reduction deal was as high as 93%. Friday’s Baker Hughes rig data showed U.S. oil drillers over the past month have added the most drilling rigs since 2012, bringing the total count to 591 rigs, the highest since October 2015.

Natural gas futures carried over last week’s steep retreat into this morning’s session and are down over 2% back below the $3-mark, pressured by forecast for less-cold weather and lighter heating demand over the next two weeks and for the rest of the winter.

(Late Friday) Reuters - will shut its Hoover Offshore Oil Pipeline System for three days in March for planned maintenance on the GA-A244 platform.

JPMorgan upgraded to ‘Overweight’ from ‘Neutral.’

(Late Friday) Reuters - Brazilian federal court suspended on Friday the $5.2 billion sale of ’s natural gas pipeline unit to a group of investors led by Brookfield Asset Management.

Press Release - Seadrill Partners has been awarded a firm two well contract plus a two well option with Statoil Canada for the West Aquarius offshore eastern Canada. Statoil Canada operates as a subsidiary of .

Reuters - Havila Shipping reported a new 7 year contract award by for RRV Havila Troll. Its contract is in direct continuation of existing contract that ends in Nov. 2017.

(Sunday) Reuters - 's Lucius facility in the U.S. Gulf resumed partial production this weekend.

(Late Friday) Reuters - said it shut its Lucius and Heidelberg production facilities in the Gulf of Mexico following a fire at Phillips 66's Paradis Pipeline Station in Louisiana.

Mizuho Securities downgraded to ‘Neutral’ from ‘Buy.’

Press Release - announced that it has entered into a new $600 million reserve based credit facility with a $425 million borrowing base effective February 10, 2017.

CIBC World Markets upgraded to ‘Outperformer’ from ‘Neutral.’

Press Release - announced that it has entered into a long-term agreement with Mærsk Supply Service to provide eight work-class remotely operated vehicles, survey and associated services, including subsea tooling, engineering, communication and data solutions, to support Mærsk's global operations.

Press Release - ’s net income for the fourth quarter of 2016 increased by approximately $43 million, or approximately $0.32 per diluted share. Net loss for the full year 2016 declined by approximately $43 million, or $0.31 per diluted share. The Company's tax liability on its Consolidated Balance Sheet was reduced by approximately $43 million. Its provision for income taxes on its Consolidated Statement of Operations was reduced by approximately $43 million for both the fourth quarter and full year 2016.

Goldman Sachs reinstated with a ‘Sell’ rating.

Reuters - ’s JV Borger, Texas, refinery reported unit 85 boiler will be begin tuning the week of 2/13/17.

(Late Friday) Reuters - reported maintenance at its 101,000 barrels per day refinery in Ferndale, Washington.

(Late Friday) Reuters - Anadarko Petroleum said it shut its Lucius and Heidelberg production facilities in the Gulf of Mexico following a fire at 's Paradis Pipeline Station in Louisiana.

Stifel Nicolaus and Company downgraded to ‘Hold’ from ‘Buy.’

Press Release - Superior Plus is pleased to announce that it has entered into an agreement with to ultimately acquire all of the outstanding shares and units of the entities that carry on the retail propane business of Canwest Propane for a total transaction value of $412 million subject to certain customary adjustments.

Press Release - announced that its MPLX Pipe Line Holdings LLC subsidiary has entered into an asset purchase agreement with Enbridge Pipelines, under which an affiliate of MPLH has agreed to purchase Enbridge's Ozark Pipeline for approximately $220 million.

Press Release - and announced they have entered into definitive agreements to form a 50/50 joint venture to acquire Advantage Pipeline, which owns a 70-mile, 16-inch crude oil pipeline located in the southern Delaware Basin.

Press Release - announced that the Company received notification from the Tag Owner stating that they have elected not to exercise their Tag Rights in regards to the transaction announced on Jan. 12, 2017.

Press Release - has been awarded a firm two well contract plus a two well option with Statoil Canada for the West Aquarius offshore eastern Canada.

Press Release - and Western Gas Equity Partners announced that effective February 13, 2017, Benjamin M. Fink has been named President and CEO.

World equities rose on renewed hopes that President Donald Trump's tax reform plans will help in boosting the economy and corporate earnings. Wall Street looked set to open higher on the first trading day of the week after closing at record highs in the previous session. The greenback hit a two-week high against the yen, while gold prices slipped further. Increase in U.S. production pushed the oil lower.

Advisory Services Tamar Essner
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