Energy Stocks Lifted By Higher Crude Oil Prices

Tuesday, March 06, 2018

Sector Commentary

Energy stocks are expected to open higher, lifted by higher crude oil prices and stronger equity futures. Investors are in a risk-on mood as North Korea is apparently willing to talk about its nuclear program.

WTI crude oil futures are higher in early trading, paring earlier losses after South Korea said it would hold a summit with North Korea for the first time in more than a decade, which investors took as a cue to sell the U.S. dollar and buy risk-sensitive assets such as commodities. The prospect of OPEC and other producers, including Russia, maintaining crude output cuts in the face of a boom in U.S. shale production has helped to push oil back above $65 a barrel this week.

Natural gas futures continued yesterday's strength in early trading as cold weather returned to key regions.

INTERNATIONAL INTEGRATEDS

(Late Monday) Reuters - Production on the large crude distillation unit at Total 's 225,500-barrel-per-day Port Arthur, Texas, refinery is cut back while the refinery restarts the Demex unit.

U.S. E&PS

(Late Monday) Press Release - PetroQuest Energy announced a net loss to common stockholders for the quarter ended December 31, 2017 of $389,000, or $0.02 per share, compared to fourth quarter 2016 net loss to common stockholders of $9,659,000, or $0.46 per share. For the year ended December 31, 2017, the Company reported a net loss to common stockholders of $11,776,000, or $0.55 per share, compared to net loss to common shareholders of $96,245,000, or $5.24 per share, for the year ended December 31, 2016. The year ended December 31, 2016 included a ceiling test write-down of $40,304,000.

CANADIAN E&PS

Press Release - Baytex Energy delivered adjusted funds flow of $106 million ($0.45 per basic share) in Q4/2017, an increase of 37% over Q4/2016, and $348 million ($1.48 per basic share) for the full-year 2017, an increase of 26% over 2016.

(Late Monday) Press Release - Parex Resources generated funds flow from operations of $93.9 million ($0.61 per share basic) a 81 percent increase compared to $51.8 million ($0.34 per share basic) in the fourth quarter of 2016. The company recorded net income of $155.1 million ($1.01 per share basic) for the year ended December 31, 2017 as compared to a $46.4 million net loss ($0.31 net loss per share basic) in the year ended December 31, 2016.

MLPs & PipelinES

(Late Monday) Press Release - Cheniere Energy is sending its first shipment of U.S. liquefied natural gas (LNG) to India. The company signed a 20-year deal to supply 3.5 million tons of LNG annually, a deal worth more than 1 billion U.S. dollars.

(Late Monday) Press Release - Gibson Energy announced that its Board of Directors has approved a quarterly dividend of $0.33 per common share payable on April 17, 2018, to shareholders of record at the close of business on March 30, 2018.

(Late Monday) Press Release - Gibson Energy reported that net loss from continuing operations decreased by 35% in 2017 to $116 million compared to a net loss of $178 million in 2016. The company's adjusted EBITDA from continuing operations increased by 14% to $278 million in 2017 compared to $244 million in 2016.

Stifel Nicolaus and Company upgraded Plains All American Pipeline to 'Buy' from 'Hold'.

Stifel Nicolaus and Company downgraded Spectra Energy Partners to 'Hold' from 'Buy'.

MARKET COMMENTARY

U.S. stock futures pointed to a higher opening on indications that North Korea was open to talks. Fears over a trade war also abated, with U.S. President Donald Trump facing growing pressure to pull back from his proposed tariffs. The dollar however, remained under pressure, while gold edged higher. Shares in Asia and Europe also regained ground. Oil prices rose on IEA forecast for strong global demand.

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