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Markets

Energy Stocks Primed for Rally as Trade War Concerns Abate

Tuesday, April 10, 2018

Sector Commentary

Energy stocks are set to rally along with broader equities markets as trade war concerns were alleviated after China's president discussed plans to further open the country's economy with measures including lowering import tariffs on autos, enforcing legal intellectual property of foreign groups and reducing duties on other consumer products.

Crude oil prices are higher by 2% with Brent breaking above $70 in extension of yesterday's strength, mirroring the equities markets, on optimism that the trade dispute between China and the US would be resolved soon. "It's not so much 'risk on/risk off', as it is 'trade war on/trade war off' and, at the moment, we're 'trade-war off'," London Capital Group's Jasper Lawler said.

U.S. natural gas futures traded within a few cents of unchanged on Tuesday as forecasts for less cold weather over the next two weeks were offset by projections of higher heating demand this week than previously expected.

U.S. INTEGRATEDS

Press Release - California Resources Corp announced that it has executed and closed a purchase and sale agreement with Chevron to acquire the remaining working, surface and mineral interests in the 47,000-acre Elk Hills field in the San Joaquin Basin of California.

Reuters - Exxon Mobil is in talks with Qatar over a possible deal that could see the country investing in the company's U.S. gas resources, the Wall Street Journal reported.

INTERNATIONAL INTEGRATEDS

Reuters - BP said it has committed to two new north sea developments which are expected to produce 30,000 barrels gross of oil equivalent a day at peak production.

Reuters - Saudi Aramco announced deals with Total , Technip and Suez. Saudi Aramco and Total said they had signed a memorandum of understanding to build a large petrochemical complex in Jubail.

Reuters - The chief executive of Total confirmed the French oil major intends to enlarge its refinery joint venture with state oil giant Saudi Aramco.

(Late Monday) Reuters - Total may restart the gasoline-producing unit at its 225,500 barrel per day Port Arthur, Texas, refinery by mid-week.

U.S. E&PS

Press Release - Bonanza Creek Energy announced the hiring of Eric T. Greager as Chief Executive Officer.

Press Release - California ResourcesCorp announced that it has executed and closed a purchase and sale agreement with Chevron to acquire the remaining working, surface and mineral interests in the 47,000-acre Elk Hills field in the San Joaquin Basin of California.

Press Release - ConocoPhillips provided several updates on disposition activity and early life-cycle acreage acquisition activities. In the first quarter of 2018, the company closed or entered definitive agreements for approximately $250 million of proceeds from the sale of non-core assets.

Press Release - Energy XXI Gulf Coast announced that the Board of Directors appointed Gabriel L. Ellisor as a member of EGC's Board, effective April 6, 2018.

Stifel Nicolaus and Co downgraded RSP Permian to 'Hold' from 'Buy'.

REFINERS

(Late Monday) Reuters - CVR Energy said CFO Susan Ball agreed to move effective date of resignation to follow Co's filing quarterly reports on form 10-Q for March quarter. It added that it had previously reported effective date of resignation of CFO was April 17.

Credit Suisse initiated coverage of Delek US Holdings at 'Outperform'.

Credit Suisse initiated coverage of PBF Energy at 'Neutral'.

MLPS & PIPELINES

Press Release - Buckeye Partners announced that it would move forward to extend access on its Laurel pipeline from Midwestern refineries to central Pennsylvania, potentially cutting into markets of Philadelphia refiners.

Credit Suisse initiated coverage of CVR Refining at 'Neutral'.

UBS Equities dropped coverage of Andeavor, CVR Refining LP, Marathon Petroleum, Phillips 66 and Valero Energy.

MARKET COMMENTARY

U.S. stock index futures were higher, tracking global equity markets as concerns over the U.S.-China trade war eased after Chinese President Xi Jinping promised to cut import tariffs. The dollar index and gold prices were little changed. Oil extended its gains from the previous session. Producer prices and wholesale inventories data are on the economic calendar.

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.