Oil Continues to Slide Amid Collapse of Silicon Valley Bank
SECTOR COMMENTARY:
The energy sector is poised for a mixed to lower start, pressured by further weakness in the crude complex but supported by strength in the major equity futures which are looking to snap a five-day losing streak as bank stocks mounted a comeback and investors digested the latest inflation data.
WTI and Brent crude oil futures extended their slide lower, reeling as the fallout over the collapse of Silicon Valley Bank continued dampen sentiment and stoke fears about a new financial crisis. Traders will be looking to the monthly oil market report OPEC later today and ahead of one prepared by the IEA tomorrow, both leading into the latest supply reports. Six analysts polled estimate on average that crude inventories rose by about 600,000 barrels last week.
Natural gas futures are holding on to yesterday’s gains and are trading near a one-week highs this morning, supported by forecasts for more cold weather and higher heating demand this week than previously expected, a preliminary drop in daily output and near record amounts of gas flowing to LNG export plants. Updated extended forecasts calling for more mild temperatures which will impact demand next week are weighing on prices. Gas flows to LNG export plants have been on track to hit record highs as Freeport LNG's export plant continues to ramp up. The plant is on track to pull in 1.0 bcfd of gas today, up from 0.3 bcfd from yesterday but still shy of their full capacity of 2.1 bcfd. Total gas flows to all seven of the big U.S. LNG export plants rose to an average of 13.1 bcfd so far in March from 12.8 bcfd in February and beating the previous monthly record of 12.9 bcfd set in March 2022.
BY SECTOR:
US INTEGRATEDS
Corteva, Bunge and Chevron U.S.A. Inc., a subsidiary of Chevron, announced a commercial collaboration to introduce proprietary winter canola hybrids that produce plant-based oil with a lower carbon profile. The goal is to increase the availability of vegetable oil feedstocks primarily for the growing domestic renewable fuels market. The companies plan to introduce the winter canola crop into the southern United States with an intention to create a new revenue opportunity for farmers with a sustainable crop rotation.
INTERNATIONAL INTEGRATEDS
HSBC upgraded Eni to Buy from Hold.
Equinor has made an oil and gas discovery near the Troll field in the North Sea, believed to contain between 24 million and 84 million barrels of oil equivalent, the company said on Tuesday.
Michael Lewis has informed that he will resign from his position as member of the board of directors in Equinor with effect as of 16 March 2023 in order to avoid potential conflict of interests following his appointment as CEO in Uniper SE. His commencement date as CEO in Uniper SE has not yet been announced.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
JP Morgan downgraded Ovintiv to Neutral from Overweight.
CANADIAN E&PS
JP Morgan upgraded Vermillion Energy to Overweight from Neutral.
OILFIELD SERVICES
No significant news.
DRILLERS
No significant news.
REFINERS
No significant news.
MLPS & PIPELINES
JP Morgan downgraded Crestwood Equity Partners to Neutral from Overweight and upgraded MPLX to Overweight from Neutral.
MARKET COMMENTARY
U.S. stock index futures rose after a volatile session amid fears of fallout from the collapse of Silicon Valley Bank, while investors awaited an inflation report that could determine whether the Federal Reserve will pause its rate hikes in March. Rate-sensitive real estate and technology stocks lifted the wider European shares. Japan's Nikkei slumped. Oil prices dropped, extending the previous day's slide. Dollar prices edged up while gold fell.
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.
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