Oil Extends Multi-Month High on Concerns Over Tight Supply
SECTOR COMMENTARY:
The energy sector is set for a mixed-to-higher start, supported by strength in the underlying commodities. Pre-market gains have been limited for energy stocks amid weakness in major equity futures which are lower following the release of hotter-than-expected August CPI data.
WTI and Brent crude oil futures are extending multi-month highs on concerns over tight supply. Yesterday, the IEA said recent output cuts from Saudi Arabia and Russia will lock in a substantial market deficit through the fourth quarter. The tight market supply is being reflected in the spread between front-month Brent contracts and contracts for delivery six months further which is at $4.68, a width not breached since last November. Additionally, OPEC on Tuesday stuck to its forecasts for robust growth in global oil demand in 2023 and 2024. Traders will now be waiting for this morning’s EIA data as last night’s API release showed builds in crude, gasoline, and distillates.
Natural gas futures are higher on lower production and expectations for a colder winter, which should increase heating demand.
BY SECTOR:
No significant news.
INTERNATIONAL INTEGRATEDS
BP announced that Bernard Looney has notified the Company that he has resigned as Chief Executive Officer with immediate effect. Murray Auchincloss, the Company's CFO, will act as CEO on an interim basis. BP's interim CEO Murray Auchincloss is expected to stick to the company's plans to shift away from oil and gas following CEO Bernard Looney's abrupt resignation, company sources said.
BP planned to invest up to 10 billion euros ($10.7 billion) in low-carbon fuels, renewables and EV charging in Germany by the end of the decade to rival local power firms, as competition over the energy transition of Europe's largest economy intensifies.
Shell planned to increase its oil production by 5,000 barrels per day (bpd) in Argentina's Vaca Muerta shale formation to 50,000 bpd by the end of the year despite limitations on investment, its chief executive said on Tuesday.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
No significant news.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
No significant news.
DRILLERS
Diamond Offshore Drilling and its wholly-owned subsidiaries, Diamond Foreign Asset Company and Diamond Finance, LLC, announced the pricing of the Issuer's private placement under Rule 144A and Regulation S of the Securities Act of 1933, as amended, of $550 million in aggregate principal amount of 8.500% Senior Secured Second Lien Notes due 2030. The Offering was upsized to $550 million from the original offering size of $500 million in aggregate principal amount of Notes. The Notes will mature on October 1, 2030 and will be issued at par. The Offering is expected to close on September 21, 2023, subject to customary closing conditions.
REFINERS
Calumet Specialty Products Partners announced that Vince Donargo has elected to step down as CFO on December 31, 2023, and he will continue in an advisory role until his retirement at the end of April, 2024.
MLPS & PIPELINES
No significant news.
MARKET COMMENTARY
U.S. stock index futures inched lower as investors refrained from big bets ahead of a key inflation reading due later in the day that could provide some clarity on an inflation outlook, and its effect on interest rates. European shares fell amid a hawkish shift in expectations from the European Central Bank's rate decision this week. Japan's Nikkei share average ended lower in range-bound trade, but losses were limited as investors bought value shares that can withstand higher rates. Gold prices held near two-week lows as higher U.S. bond yields weighed on bullion's appeal. The dollar edged up against a basket of major currencies. Oil prices rose, driven by expectations that crude supply will remain tight for the rest of the year.
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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