Markets

Energy Market Commentary: Investors Awaiting Government Inventory Report

Wednesday, August 16, 2017

Sector Commentary

The energy sector is poised for a mixed to higher start, lifted by strength in the crude complex and major equity futures. With little sector news again today, investors will be paying close attention to the government inventory report for the next catalyst. Broadly, the markets are on watch for the release of the Federal Reserve's minutes from its last meeting for indications on where interest rates are headed.

WTI and Brent crude oil futures were marginally higher in early trading, rebounding from a three-week low hit in yesterday’s session following last night’s API report that showed U.S. crude inventories fell by 9.2 million versus analyst expectations of a 3.1 million barrel draw and a dip in Libyan output due to security breaches at a major field. The gains also come despite strength in the dollar following bullish retail sales data and a mixed OPEC compliance report from Iraq showing exports from their southern terminals have fallen so far this month, suggesting that while the country is trying to step up compliance with OPEC output cuts, it has a long way to go to match its peers in the producer group. Trading will be choppy ahead of the EIA data due out later this morning.

Natural gas futures continued to slide lower, retreating from last week’s substantial rally on mixed weather forecasts in key consuming region and ahead of tomorrow’s storage read.

INTERNATIONAL INTEGRATEDS

(Late Tuesday) Reuters - Petrobras produced the equivalent of 2.74 million barrels per day of oil and natural gas on average in July.

(Late Tuesday) Reuters - Royal Dutch Shell plans to restart the catalytic reformer at its 225,800 barrel-per-day Norco, Louisiana, refinery on Thursday or Friday.

U.S. E&PS

(Late Tuesday) Press Release - Cabot Oil & Gas announced the election of Ms. Amanda M. Brock and Mr. Marcus A. Watts to its Board of Directors, effective immediately. The addition of Ms. Brock and Mr. Watts to the Board will bring the total to eight directors, with seven qualifying as independent directors.

CANADIAN E&PS

Press Release - Pengrowth Energy completed sale of its oil and gas assets located in Olds/Garrington area, central Alberta, Canada, for a cash consideration of C$300 million.

(Late Tuesday) Press Release - Whitecap Resources is pleased to announce that a cash dividend of Cdn. $0.0233 per common share in respect of August operations will be paid on September 15, 2017 to shareholders of record on August 31, 2017.

DRILLERS

(Late Tuesday) Press Release - Diamond Offshore Drilling announced that it has completed a public offering of $500,000,000 aggregate principal amount of its 7.875% senior notes due 2025.

Press Release - Michael A. Cawley retired as a member of the board of directors of Noble Corp. Mr. Cawley informed the Board on August 11, 2017 that he was resigning his position on the Board effective immediately after more than 30 years as a director.

MLPs & Pipelines

Press Release - On August 14, 2017, Jonathan Christodoro and Samuel Merksamer resigned from the Board of Directors of Cheniere Energy and the Board appointed Andrew Langham and John J. Lipinski to serve as members of the Board, effective immediately.

MARKET COMMENTARY

U.S. stock index futures rose and the dollar held on to gains ahead of minutes from the U.S. Federal Reserve's last policy meeting. Building permits and housing starts data are on the economic calendar. Cisco and NetApp are scheduled to report after the closing bell. European markets were buoyed by strength in mining and oil shares and most Asian stocks closed higher. Oil prices were lifted by declining U.S. crude inventories. Gold was slightly lower.

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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