Markets

Energy Market Commentary May 18, 2017: Nasdaq Advisory Services

thursday, may 18, 2017

Sector Commentary

Oil and gas stocks are set for more weakness as crude oil futures are lower and as the broader equity markets are alluding to an extension of yesterday’s losses as uncertainty looms regarding the Trump administration’s future amid an investigation into his ties with Russia. Sector news remains light and investors are still timid ahead of OPEC’s meeting next week.

Crude oil futures are down by over 1% in early trading, giving back yesterday’s gains after the EIA inventory report served as a reminder that the domestic oil markets are well supplied as supplies showed smaller than expected draws. Signs of a deepening political crisis in Washington accelerated the decline in the US dollar with investors becoming increasingly cautious following the latest reports of links between Russia and the team in the White House.

Natural gas futures are higher this morning, paring back on some of yesterday’s large losses ahead of the inventory report which is expected to show a build of 61 Bcf.

U.S. INTEGRATEDS

(Late Wednesday) Reuters - Exxon Mobil announced it will bring its Mobil-brand gas stations to Mexico, pumping $300 million in the coming decade.

INTERNATIONAL INTEGRATEDS

Press Release - PGNiG made a demand that the European Commission should penalize Gazprom for breaching anti-trust regulations and create competitive conditions on the gas market.

(Late Wednesday) Reuters - Petrobras will pay its first shareholder dividend in three years if the company turns a profit in 2017.

(Late Wednesday) Reuters - Petroleo Brasileiro said its oil and natural gas output in April was 2.72 million barrels of oil equivalent per day.

(Late Wednesday) Reuters - Ibama granted authorization for Petroleo Brasileiro to operate the P-66 platform in the Lula Sul offshore oil field in the Santos basin.

Press Release - Oceaneering International announced that one of its oilfield business segments, Asset Integrity, has been awarded a three-year operational inspection Frame Agreement extension with Statoil Petroleum AS. Statoil Petroleum AS operates as a subsidiary of Statoil ASA.

CAnadian INTergrateds

(Late Wednesday) Press Release - ConocoPhillips completed its previously announced transaction with Cenovus to sell its 50 percent non-operated interest in the Foster Creek Christina Lake oil sands partnership, as well as the majority of its western Canada Deep Basin gas assets.

U.S. E&PS

(Late Wednesday) Press Release - ConocoPhillips completed its previously announced transaction with Cenovus to sell its 50 percent non-operated interest in the Foster Creek Christina Lake oil sands partnership, as well as the majority of its western Canada Deep Basin gas assets.

Press Release - Noble Energy announced that it has signed a definitive agreement to divest the holding company which owns a 50 percent interest in CONE Gathering and 21.7 million common and subordinated limited partnership units to a portfolio company of Quantum Energy Partners for total cash consideration of $765 million.

OIL SERVICES

Press Release - Halliburton announced its Board of Directors unanimously elected Jeff Miller, the Company’s president and a board member, to the position of president and CEO. Dave Lesar, who has led Halliburton as chairman and CEO since 2000, will continue serving the Company as executive chairman. The leadership changes are effective June 1, 2017.

Press Release - ION Geophysical announced that the trial court issued an order on May 16, 2017 in the previously-reported lawsuit of WesternGeco L.L.C. v. ION Geophysical Corporation confirming its bench order, awarding enhanced damages of $5 million to WesternGeco.

Press Release - National Oilwell Varco announced that its Board of Directors declared the regular quarterly cash dividend of $0.05 per share of common stock, payable on June 30, 2017 to each stockholder of record on June 16, 2017.

Press Release - National Oilwell Varco announced it broken ground on two manufacturing plants that will significantly strengthen the Company’s market-leading positions in providing composite pipe technologies and tubular coatings within Saudi Arabia. Both facilities will be located at MODON 3 near the city of Dammam.

Press Release - Oceaneering International announced that one of its oilfield business segments, Asset Integrity, has been awarded a three-year operational inspection Frame Agreement extension with Statoil Petroleum AS. Statoil Petroleum AS operates as a subsidiary of Statoil ASA.

Press Release - SEACOR Holdings previously provided notice to holders of its (1) 2.50% convertible senior notes due 2027 and (2) 3.00% convertible senior notes due 2028 that they have the right to convert their Notes in connection with the previously announced spin-off of SEACOR's wholly-owned subsidiary, SEACOR Marine Holdings by way of a dividend of all of SEACOR Marine's common stock to holders of SEACOR common stock. On May 17, 2017, SEACOR notified the trustee under the indenture for each of the 2027 Notes and the 2028 Notes that from May 17, 2017 through June 1, 2017, SEACOR will physically settle any Notes surrendered for conversion in shares of SEACOR common stock.

(Late Wednesday) Press Release - Tidewater announced that it and certain of its subsidiaries, filed voluntary petitions under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware to pursue a prepackaged plan of reorganization in accordance with its previously announced restructuring support agreement with certain creditors to effectuate a comprehensive balance sheet restructuring.

DRILLERS

Instinet upgraded Noble Corporation to ‘Neutral’ from ‘Reduce.’

MLPs & Pipelines

(Late Wednesday) Press Release - DCP Midstream announced the planned divestiture of its Douglas gathering system in Wyoming, which includes approximately 1,500 miles of gathering lines, to Tallgrass Energy Partners for approximately $128 million, subject to customary closing adjustments. The transaction is expected to close on or before the end of the quarter.

MARKET COMMENTARY

Global markets extended losses and U.S. stocks pointed to a lower start for Wall Street as looming uncertainty over U.S. President Donald Trump's political future continued to weigh on markets. Safe-haven gold hovered near a two-week high, prompted by the weaker dollar. Oil prices fell on signs that the market remained well supplied with crude despite efforts by OPEC and other big exporters to curb production and support prices.

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

Latest Markets Videos