Markets

Energy Market Commentary: Oil And Natural Gas Prices Inching Higher

Monday, January 08, 2018

Sector Commentary

Energy stocks are set to open fractionally lower based on premarket activity despite oil and natural gas prices inching higher. Broader index futures are indicating a modestly lower open following last week's record breaking performance, which will keep energy equities mostly in the red, at least at the open of the session.

Sector news flow is extremely light as quiet periods begin ahead of the fast approaching quarterly and full year earnings reporting period. Additionally, corporate and investor attention will turn to the 2-day Goldman Sachs Energy Conference set to begin tomorrow.

Oil prices were slightly above breakeven, extending last week's gains, which culminated in prices reaching 2-1/2 year highs last week on signs of a balancing oil market and unplanned supply outages. However, concerns are mounting of a potential ramp up in U.S. shale production amid higher oil prices , which could dent the recent rally. "The U.S. oil price is now into a range that is anticipated to attract increased shale oil production," said Ric Spooner, chief market analyst at CMC Markets in Sydney. "Traders may decide that discretion is the better part of valour while markets wait on evidence of what happens to the rig count and production levels over the next couple of months."

Natural gas futures were higher by 1%, though prices are expected to come off last week's highs amid expectations of moderating temperatures through this week following last week's deep freeze.

INTERNATIONAL INTEGRATEDS

(Saturday) Press Release - ArcLight Capital Partners, through its affiliate, acquired a 26.5% non-operated interest in the Perdido deepwater production facility located in Gulf of Mexico, the US, from BP Exploration & Production Inc., a subsidiary of BP Plc .

Press Release - Zenith Energy announced that it has signed an agreement to acquire a liquids storage terminal facility in Hamburg, Germany from Royal Dutch Shell . The transaction is expected to close in the first half of 2018. Terms of the transaction were not disclosed.

(Saturday) Press Release - DCC Energy and a subsidiary of DCC plc, completed the acquisition of LPG business in Hong Kong and Macau, from Shell Gas Holdings BV, a subsidiary of Royal Dutch Shell , for a purchase consideration of HK$1,165 million.

U.S. E&PS

Press Release - Denbury Resources announced that upon the January 5, 2018 expiration of its previously announced private exchange offers, eligible holders of outstanding senior subordinated notes due 2021, 2022 and 2023, agreed to exchange approximately $174.3 million in aggregate principal amount of Old Notes for approximately $133.5 million in "New Notes".

OIL SERVICES

Press Release - Baker Hughes announced that the Baker Hughes international rig count for December 2017 was 954, up 12 from the 942 counted in November 2017, and up 25 from the 929 counted in December 2016. The international offshore rig count for December 2017 was 191, up 8 from the 183 counted in November 2017, and down 19 from the 210 counted in December 2016.

(Late Friday) Press Release - Core Laboratories repurchased a total of 30,000 of its common shares during the period beginning Wednesday, 27 December 2017, through Friday, 5 January 2018, at an average price stated in USD of $109.10 per share. These repurchases were made as part of the Company's existing share repurchase program.

MLPs & PipelinES

Press Release - Enterprise Products Partners announced that the partnership plans to expand its butane isomerization facility at its complex in Mont Belvieu, Texas. This expansion is supported by long-term agreements to provide butane isomerization, storage and pipeline services, including a 20-year, 35,000 barrel per day fee-based, tolling agreement.

Press Release - LINN Energy announced it is amending the terms of its previously announced cash tender offer to increase the price at which it will purchase shares of its Class A common stock to $48.00 per share from $44.00 per share.

MARKET COMMENTARY

U.S. stock futures pointed to a lower opening after last week's gains, which was the best start to a year since more than a decade. Meanwhile, confidence over global economic growth continued to boost investor appetite for world stocks, pushing major indexes in Europe and Asia toward new highs. The recent trend of dollar-selling took a breather as greenback found support from high Treasury yields, while gold prices dipped.

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 . This communication and the content found by following any link herein are being provided to you by Corporate Solutions, a business of Nasdaq, Inc. and certain of its subsidiaries (collectively, "Nasdaq"), for informational purposes only. Nasdaq makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Sources include Reuters, TR IBES, WSJ, The Financial Times and proprietary Nasdaq research.

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


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