Oil Extends Recent Decline as Economic Headwinds Dampen Risk Sentiment
SECTOR COMMENTARY:
The energy sector is set for a lower start, pressured by weakness in crude contracts. U.S. stocks are expected to bounce back from yesterday’s declines after data pointed to a cooling labor market, which eased worries over more interest rate hikes.
WTI and Brent crude oil futures gave back yesterday’s gains and extended their recent decline as economic headwinds dampened risk sentiment in crude and outweighed supply woes. The OPEC+ Joint Ministerial Monitoring Committee announced to keep the group’s policy unchanged during their meeting on Wednesday. Saudi Arabia's energy ministry also confirmed it will continue its voluntary 1 million barrel per day (bpd) crude supply cut until the end of this year. Traders mostly shrugged off last night’s API data which showed a draw of 4.21 million barrels last week, ahead of EIA inventory data due later today.
Natural gas futures are higher this morning on a decline in output and forecasts for more demand next week than previously expected.
BY SECTOR:
US INTEGRATEDS
Chevron-led Tengizchevroil, will complete its expansion six months later than the previously set June 2024 deadline, Kazakh Energy Minister Almasadam Satkaliyev said. The delay is due to additional work required in order to ensure environmental safety, he told a briefing. The expansion will increase Tengizchevroil's output by 12 million metric tons a year.
INTERNATIONAL INTEGRATEDS
QatarEnergy has been awarded a new exploration block offshore Egypt, according to a company statement released. The exploration and production rights were awarded for block EGY-MED-E8 (East Port Said) to a consortium comprising of QatarEnergy (33%), ENI (Operator, 34%) and BP (33%).
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
APA Corporation announced the achievement of an environmental, social and governance (ESG) goal to convert more than 2,000 pneumatic devices to instrument air or through-valve retrofit in its U.S. operations. The goal was reached three months ahead of schedule, and results in an estimated annualized methane reduction of 1,000 tonnes or 25,000 tonnes of carbon dioxide equivalents.
Civitas Resources signed an agreement with Vencer Energy, a Vitol investment, to acquire oil producing assets in the Midland Basin of west Texas for a total consideration of approximately $2.1 billion, subject to customary terms, conditions, and closing price adjustments. The Acquisition is expected to close in January 2024 with an effective date of January 1, 2024.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
No significant news.
DRILLERS
No significant news.
REFINERS
No significant news.
MLPS & PIPELINES
No significant news.
MARKET COMMENTARY
A persistent selloff in global government bond markets pushed Treasury yields higher across the globe, dampening risk appetite for equities. Wall Street futures traded flat, ahead of the upcoming labor market data and ISM non-manufacturing PMI which could provide additional insight into the state of the economy. European shares traded slightly higher while Asian shares dropped, with the Nikkei falling to over a four-month low. Saudi and Russia confirming cuts till year-end did not offset weak demand fears, pushing oil lower. Gold held near a seven-month low, while palladium slipped to its weakest level since late 2018.
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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