Oil Extends Losses Amid Gloomy Global Manufacturing Data

SECTOR COMMENTARY:

The energy sector is set for a lower start, pressured by weakness in crude oil contracts. Meanwhile, the broader market futures are higher as investors wait for quarterly results from Nvidia and ahead of this year’s annual economic symposium at Jackson Hole.

WTI and Brent crude oil futures are extending losses for the third-consecutive day, as optimism for a strong rebound in demand dimmed amid gloomy global manufacturing data, ahead of the U.S. PMI print due later today. Market participants are also keeping an eye out for any comments that may provide clues on the Federal Reserve’s monetary policy path at this year's annual meeting at Jackson Hole. Manufacturing results have been dull so far, with Japan reporting shrinking factory activity for a third-straight month in August. Traders also digested a decline in Euro zone business activity and a modest decrease in Britain’s economy. API data showed crude stocks fell by 2.4 million barrels last week, slightly smaller than the 2.9 million barrel decrease analyst were expecting.

Natural gas futures are adding to yesterday’s gains, on expectations for a build of +30 to +35 Bcf vs the 5-yr average of +49 Bcf in tomorrow’s EIA weekly inventory report.

By Sector:

US INTEGRATEDS

Brightmark RNG Holdings LLC, a joint venture partnership between Chevron U.S.A. Inc., a subsidiary of Chevron, and Brightmark Fund Holdings LLC, a subsidiary of Brightmark LLC, announced the delivery of the first renewable natural gas (RNG) from its Larson Project in Okeechobee County, Florida. The Larson Project is comprised of four lagoon anaerobic digesters located at Larson Family Farms. This marks the joint venture's inaugural RNG project in the state and builds on the joint venture's extensive network of projects across the U.S. to produce dairy RNG for lower carbon intensity transportation fuel. 

Chevron’s Australia unit said it would increase domestic gas production capacity at its Wheatstone project in Western Australia.

INTERNATIONAL INTEGRATEDS

Equinor and its partners will inaugurate the world's largest floating offshore wind power farm on Wednesday, whose output will supply nearby oil and gas platforms and cut their greenhouse gas emissions.

Shell is considering a sale of its Singapore refining and petrochemical plants as part of a broader strategic review and has hired investment bank Goldman Sachs to explore a potential deal, said several sources close to the matter.

Global gas markets are well balanced with inventory levels keeping high in North Asia and Europe, but any strikes at Australia's liquefied natural gas plants could impact short-term prices, a senior Shell executive said on Wednesday.

CANADIAN INTEGRATEDS

No significant news.

U.S. E&PS

EQT announced it has closed its previously announced acquisition of THQ Appalachia I Midco, LLC and THQ-XcL Holdings I Midco, LLC. Final consideration after purchase price adjustments was comprised of approximately $2.4 billion of cash and 49.6 million shares of EQT common stock. EQT funded the cash portion of the consideration with $1.25 billion of term loan borrowings, $1 billion of cash on hand and the $150 million cash deposit previously held in escrow.

CANADIAN E&PS

No significant news.

OILFIELD SERVICES

No significant news.

DRILLERS

No significant news.

REFINERS

On August 22, 2023, HF Sinclair entered into a Stock Purchase Agreement with REH Company, pursuant to which the Company agreed to repurchase from the Selling Stockholder 1,813,565 shares of the Company's outstanding common stock, par value $0.01 per share, in a privately negotiated transaction. The price per share to be paid by the Company under the Stock Purchase Agreement is $55.14 per share resulting in an aggregate purchase price of $99,999,974. The purchase price will be funded with cash on hand. The Stock Purchase Agreement contains customary representations, warranties and covenants of the parties. The shares to be repurchased under the Stock Purchase Agreement will be held as treasury stock by the Company. This share repurchase is the tenth privately negotiated transaction between the Company and the Selling Stockholder.

MLPS & PIPELINES

Awilco LNG Group reported unaudited results for the three months ended June 30, 2023. Awilco LNG achieved a net result of USD 11.0 million and profit per share of USD 0.08 in the second quarter, up from a net result of USD 9.0 million and USD 0.07 per share in the first quarter 2023. First half 2023 net result ended at USD 20.1 million or USD 0.15 per share. Net freight income of USD 21.9 million in second quarter 2023, up from USD 20.5 million in first quarter 2023. First half 2023 net freight income ended at USD 42.4 million, up from USD 24.3 for the same period last year. EBITDA second quarter 2023 ended at USD 18.4 million, up from USD 16.6 million in first quarter 2023. First half 2023 EBITDA ended at USD 35.0 million, up from 17.7 million for the same period last year. Vessel utilization was 100% in second quarter and for the first half year in total, compared to 88% and 94% for the same periods last year. Net TCE came in at USD 120,500 and USD 117,150 per day for second quarter and first half year respectively, compared to USD 56,400 and USD 67,400 per day respectively for the same periods last year. o In June the Company paid NOK 0.50 per share in dividend, corresponding to USD 6.4 million bringing total paid dividend during first half of 2023 to NOK 1.00 per share, corresponding to USD 12.5 million in total. On August 22, 2023, the Board authorized a cash dividend payment of NOK 0.25 per share to be paid in September. After completing the ongoing dry docking of both vessels, the Board expects to increase dividend payments for the next quarters.

MARKET COMMENTARY

U.S. stock index futures jumped, with the spotlight firmly on Nvidia quarterly results that could potentially reignite an artificial intelligence-fuelled rally in megacap growth stocks this year. European equities rose, led by mining and healthcare stocks. In Asia, Japan's Nikkei ended higher for a third straight session, while China stocks closed lower amid rising fears of contagion risks in the country's struggling real estate sector. The euro fell to a more than two-month low against the dollar on weak European PMI data. Oil prices fell, while gold advanced. Manufacturing and services PMI data are due later in the day.

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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