Oil Down Amid Signs U.S. is at Peak Production
SECTOR COMMENTARY:
Energy stocks are set for a mixed start, pressured by weakness in the crude complex, but supported by gains in the major equity futures. U.S stocks are set to start today’s session higher as investors digest October’s PPI print, which fell by 0.5%, to mark its biggest monthly drop since April 2020.
WTI and Brent crude oil futures are in negative territory on signs the United States is at peak production and a stronger dollar, which offset strong economic data from China. In October, China’s manufacturing and retail sales growth beat expectations which eased concerns about waning demand. However, a full post-COVID economic recovery has been limited to weakness in the property sector. Investors will be keeping an eye on today’s DOE Weekly Petroleum Status Report as last night’s API print showed a weekly crude build of 1.8M barrels.
Natural gas futures have recovered yesterday’s declines this morning on forecast for colder temperatures and higher heating demand than previously expected.
BY SECTOR:
US INTEGRATEDS
Chevron said it is evaluating options for around 70,000 net acres of land in East Texas' Haynesville shale formation after pausing development earlier this year, with sources saying a full sale is one option under consideration. The move would be a small first step by the energy major which is seeking to offload assets worth up to $15 billion over the next five years following its recent multi-billion dollar acquisitions of more than 700,000 acres in U.S. shale assets.
ExxonMobil planned to shut a reformer in January at its 522,500 barrel-per-day (bpd) Baton Rouge, Louisiana, refinery for a planned overhaul, people familiar with Exxon’s plans said. The Powerformer PHLA-2 reformer with two 39,000-bpd production trains is scheduled to be shut into May for the overhaul, the sources said.
INTERNATIONAL INTEGRATEDS
British oil and gas company BP produced 15 million tons of oil in Azerbaijan between January and October, Azerbaijan's Energy Ministry said. Its January-September output stood at 13.5 million tons, the ministry reported in October.
Six Italian energy providers including Eni and Enel were fined more than 15.6 million euros ($16.31 million) for charging consumers more during a ban on unilateral price hikes, Italy's antitrust agency (AGCM) said. The billing took place between August 2022 and June 2023, when the government banned unilateral price increases for gas and electricity supplies, AGCM said a press release.
The U.S. Department of Energy (DOE) rejected for a second time oil major Repsol SA'srequest to reopen regulators' approval of Venture Global LNG's Calcasieu Pass export plant in Louisiana. The decision was cheered by a spokesperson for Venture Global, which is embroiled in contract arbitration cases with several customers over its insistence it does not have to provide contracted cargoes while the plant is undergoing commissioning.
A planned overhaul of the gasoline-producing fluidic catalytic cracker (FCC) at TotalEnergies’ 238,000 barrel-per-day (bpd) Port Arthur, Texas refinery is expected to continue into late November, said people familiar with plant operations. The 76,000-bpd gasoline-producing fluidic catalytic cracker-2 was shut on Aug. 23 for a planned overhaul.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
No significant news.
Mizuho downgraded Pioneer Natural Resources to Neutral from BUY.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
Chart Industries received Korean Gas Safety (KGS) certification and approval of our liquid hydrogen (LH2) bulk transport trailers built in Theodore, Alabama for the Korean market, making us the first and only supplier with a LH2 trailer design currently approved to serve the growing Korean market. Chart worked closely with KGS to ensure that their stringent safety requirements would be met or exceeded with our offering.
DRILLERS
Nabors Industries announced that Nabors Industries, Inc. ("NII"), its indirect wholly-owned subsidiary, has commenced an offering of $550 million senior priority guaranteed notes due 2030. The Notes will be fully and unconditionally guaranteed by Nabors and certain of Nabors' indirect wholly-owned subsidiaries which also guarantee the Existing Senior Priority Guaranteed Notes.
REFINERS
No significant news.
MLPS & PIPELINES
The Awilco LNG Group reported unaudited results for the three months ended September 30, 2023. Awilco LNG achieved a net result of USD 3.3 million and profit per share of USD 0.03 in the third quarter, down from a net result of USD 11.0 million and USD 0.08 per share in the second quarter 2023. Net freight income of USD 14.8 million in third quarter 2023, down from USD 21.9 million in second quarter 2023. EBITDA in third quarter 2023 ended at USD 11.1 million, down from USD 18.4 million in second quarter 2023. Both vessels successfully completed their scheduled second special survey, including dry-dock during the quarter. Surveys were done on time and at a total cost for both vessels of USD 12.2 million with a total of 60 days off-hire including positioning and repositioning.
MARKET COMMENTARY
Wall Street futures rose as an encouraging inflation report fueled hopes U.S. interest rates have peaked, while investors eye producer prices and retail sales data due later in the day. Europe's STOXX 600 climbed to a more than one-month high on easing inflation across major economies. Japan's Nikkei closed higher, topping the 33,000 psychological level for the first time in nearly two months, on strong corporate earnings and dovish Fed bets. Gold prices rose to a more than one-week high. Meanwhile, the dollar edged up after its biggest drop in a year the day before. Oil prices dipped amid signs the U.S. is at peak production, offsetting positive crude demand signals from top consumer China.
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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