Oil Declines Amid Wait for OPEC+ Meeting
SECTOR COMMENTARY:
The energy sector is poised for a broadly lower start, pressured by weakness in the underlying commodities and in the major equity futures. U.S. stock index futures slipped, ahead of a key inflation reading and commentary from Federal Reserve policymakers later in the week, while retailers were in focus as holiday shopping picked up steam with Cyber Monday deals.
WTI and Brent crude oil futures are extending declines for the third-straight session as investors awaited this week's OPEC+ meeting and expected curbs on supplies into 2024. Meanwhile, efforts by Iraq to resume northern crude exports via Turkey are ongoing. Iraqi oil officials will meet representatives of international oil companies and Iraqi Kurdish officials in early December to discuss contract changes central to the issue.
Natural gas futures are trading down for the second-consecutive day as the NOAA's 6-10 day outlook predicts above-normal temps over a large portion of the US, while below-normal temps are likely across southern Calif, UT, NM, AZ and CO.
BY SECTOR:
US INTEGRATEDS
No significant news.
INTERNATIONAL INTEGRATEDS
Eltel Norway and Equinor have signed a frame agreement regarding telecom-specific upgrade and modification services. Estimated value of the four-year agreement is NOK 235 million, about EUR 20 million. The frame agreement covers services regarding maintenance, modifications, and installations of telecommunication solutions. Eltel will deliver the services both on and between Equinor’s offshore installations and on onshore sites. The contract period runs from 1 December 2023 until 31 December 2027, after which there is an option for an additional two plus two years.
Petrobras said that the contract for the sale of its LUBNOR refinery in northeastern Brazil has been terminated after unespecified conditions required for the deal to go through were not met. Petrobras had agreed to sell LUBNOR, which is capable of processing 8,200 barrels of oil per day, to Grepar for $34 million last year. The oil giant sait it is committed to maintain LUBNOR's operations following the failed deal.
Morgan Stanley initiated coverage of BP with Overweight rating and a $46.9 price target.
Morgan Stanley initiated coverage of Eni with Equal-Weight rating and a $36.4 price target.
Morgan Stanley initiated coverage of Equinor ASA with Equal-Weight rating and $33.3 price target.
Morgan Stanley initiated coverage of Shell PLC with Equal-Weight rating and a $69.5 price target.
Morgan Stanley initiated coverage of TotalEnergies SE with Overweight rating and a $82.9 price target.
CANADIAN INTEGRATEDS
Suncor Energy said it has restarted the Terra Nova floating, production, storage and offloading vessel in Canada and production is expected to ramp up over the coming months. Terra Nova is an oilfield located offshore Newfoundland and Labrador.
U.S. E&PS
Truist Securities initiated coverage of Vital Energy with Buy rating and a $70 price target.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
Shawcor, dba Mattr Infratech announced that Norwegian and Mexican antitrust approvals have been issued for the sale of the majority of its pipe coating business to Tenaris S.A. announced through the Company’s press release dated August 14, 2023. Accordingly, all required regulatory approvals for the transaction have been obtained. The transaction is now expected to close in the next two weeks, subject to customary closing conditions. Upon closing, the Company expects to receive the agreed-upon purchase price of $166 million USD, or approximately $230 million CAD at current exchange rates, on a cash-free, debt-free basis, subject to normal working capital adjustments. Consistent with previously shared estimates, the aggregate net cash proceeds to be received by the Company in relation to this transaction are still expected to be modestly higher than the agreed purchase price.
DRILLERS
No significant news.
REFINERS
No significant news.
MLPS & PIPELINES
No significant news.
MARKET COMMENTARY
Wall Street futures slipped ahead of the much-anticipated inflation data and comments from Federal Reserve policymakers later in the week, which would provide a clearer picture about further interest rate hikes. European shares fell weighed by losses in energy stocks, while cautious investors awaited comments from European Central Bank (ECB) President Christine Lagarde on monetary policy later in the day. In Asian equity markets, Japan’s Nikkei ended in the red, whereas the Chinese stocks closed lower dragged down by slower growth of industrial firms. Gold prices rose on a weaker dollar. Oil prices slipped as investors waited for an OPEC+ meeting later this week for an agreement expected to curb supplies into 2024.
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 Rich Pontillo.
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Nasdaq Advisory Services Energy Team is part of Nasdaq's Advisory Services. 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.
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