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Oil

Oil Futures Rise on Slow Return of Production After Hurricane Ida

After two consecutive days of declines, WTI and Brent crude oil futures rebounded this morning and are currently up over 1% in early trading, supported by reports showing a slow return of production in the GoM following Hurricane Ida.

SECTOR COMMENTARY:

The energy sector is poised for a mixed start, backed by strength across the underlying commodities but pressured by weakness in the major equity futures which fell as investors continue to assess the impact the delta variant will have on economic growth on top of Friday's weak August payrolls data and uncertainty over tapering. Investors will also be looking for headlines coming out of the Barclays CEO Energy conference which started this morning.

After two consecutive days of declines, WTI and Brent crude oil futures rebounded this morning and are currently up over 1% in early trading, supported by reports showing a slow return of production in the GoM following Hurricane Ida and news that protesters blocked exports from two Libyan ports. About 80% of U.S. Gulf production remained offline on Tuesday, with 79 production platforms still unoccupied. About 17.5 million barrels of oil have been lost to the market to date, with shutdowns expected to continue for weeks. Ida could reduce total U.S. production by as much as 30 million barrels this year, according to energy analysts. Traders will be closely watching the delayed inventory data from the API industry this evening and the EIA tomorrow for a clearer picture of the storm's impact on crude production and refinery output. In Libya, protesters blocked oil exports at the ports of Es Sider and Harouge, although other engineers said production at fields that supply the terminals was unaffected.

Natural gas futures rebounded this morning following yesterday’s sharp retreat, lifted by updated weather forecasts.

BY SECTOR:

US INTEGRATEDS

Chevron U.S.A. Inc., through its Chevron Products Company division, Delta Air Lines, and Google announced a memorandum of understanding to track sustainable aviation fuel test batch emissions data using cloud-based technology. Through the project, Chevron plans to produce a test batch of SAF at its El Segundo Refinery and will sell the sustainable fuel to Delta.

INTERNATIONAL INTEGRATEDS

According to ReutersBP is in the process of restarting its Gulf of Mexico operations in the aftermath of Hurricane Ida, the company said on Tuesday, adding that repairs were underway at its onshore assets in Houma and Port Fourchon.

Eni announced that CFS (Commonwealth Fusion Systems) successfully completed the test aiming to demonstrate the operation of the innovative magnet for plasma fusion confinement, for the first time made with HTS (High Temperature Superconductor) technology.

Petrobras said it has put up for sale its Urugua and Tambau oilfields, both located in the Santos Basin, Reuters reported. The company said that the fields produced an average of 5,000 barrels of oil per day and 918,000 cubic meters of gas a day in 2020.

Repsol has selected Univation Technologies’ UNIPOL PE Process for its 300,000 TPY polyethylene plant. This new PE plant will be constructed along with another polymer production unit with both plants located at Repsol’s Industrial Complex in Sines, Portugal. The combined project represents the largest industrial investment in Portugal in the last ten years with a total value at €657 million (ca. $775 million).

According to Reuters, Guyana awarded a unit of Saudi Aramco a tender to purchase a portion of the country's oil production, and the two parties will likely enter into a one-year marketing deal, an official said. 

According to Reuters, Baoshan Iron & Steel said it had signed an initial pact with the world's top crude oil producer Saudi Aramco to study building a steel plate factory in Saudi Arabia. The nonbinding memorandum of understanding was one of a number of agreements state-controlled Aramco 2222.SE inked on Tuesday in a major expansion of its industrial investment programme. 

CANADIAN INTEGRATEDS 

No significant news.

U.S. E&PS

Gulfport Energy announced Timothy Cutt will assume role of CEO. 

Murphy Oil Corp provided update following Hurricane Ida. Company is ready to produce, awaiting third-party downstream capabilities. ~9M boe/d producing now; ~1M boe.d remain offline for repairs.

CANADIAN E&PS

Vermilion Energy announced the appointment of Dion Hatcher as President effective January 1, 2022. He will replace Curtis Hicks, Vermilion's current President, who will step down and continue as an advisor to the Company until April 1, 2022. Lorenzo Donadeo will continue in his current role as Executive Chairman.

OILFIELD SERVICES

ChampionX announced the sale of its Corsicana, Texas, chemical manufacturing plant to RPM International Inc., a global leader in specialty coatings, sealants, building materials and related services. 

ChampionX informed Wells Fargo, National Association, the trustee of the Company’s 6.375% Senior Notes due 2026 of its intent to redeem $90 million of the Notes this month. Notice is expected to be provided to the holders of the Notes on or about September 13, 2021, with redemption ten days following Notice. The Notes will be redeemed pursuant to Section 11.01 of the Indenture and paragraph 5 of the Notes at 104.781% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

KBR announced the successful completion of the Directed Energy Maneuver-Short Range Air Defense (DE M-SHORAD) Combat Shoot-Off, which culminated with U.S. Army Soldiers successfully executing a series of vignettes demonstrating the capabilities of a laser-equipped Stryker against representative threats in a realistic environment.

National Energy Services Reunited and Cactus announced that they have entered into an agreement to provide and deploy Cactus frac rental equipment in the Middle East, as well as other initiatives in the key markets.

Schlumberger New Energy announced an investment and collaboration agreement to deploy EnerVenue’s uniquely differentiated nickel-hydrogen battery technology, which is a key enabler of stationary energy storage solutions. Schlumberger New Energy and EnerVenue will work together to progress large-scale deployment of nickel-hydrogen battery technology across selected global markets.

DRILLERS

The Abu Dhabi National Oil Company and its subsidiary ADNOC Drilling Company and Helmerich & Payne jointly announced today a strategic alliance, that will see ADNOC Drilling acquire eight FlexRig® land rigs from H&P for $86.5 million. Following this transaction, H&P will make a $100 million cornerstone investment into ADNOC Drilling’s recently announced Initial Public Offering.

REFINERS

No significant news.

MLPS & PIPELINES

Cheniere Energy announced that its Board of Directors approved a comprehensive, long-term capital allocation plan designed to achieve an investment grade balance sheet, return significant capital to shareholders over time, and continue to invest in accretive organic growth. With financial results for 2021 expected at the high end of the guidance ranges, and the substantial completion of Sabine Pass Train 6 now expected in the first quarter of 2022, the Company has reached a cash flow inflection point and expects to generate ~$10 billion of cumulative Distributable Cash Flow through 2024 with annual run-rate DCF of $2.6 – $3.0 billion, enabling execution on the balance sheet, capital returns, and accretive growth priorities. The Plan is designed to achieve a run-rate DCF of $15 – $17 per share on a long-term basis, inclusive of the Corpus Christi Stage 3 Project. The company plan for ~$1 billion of annual debt repayment, targeting investment grade consolidated credit metrics by the early-to-mid 2020s, declaring an inaugural quarterly dividend of $0.33, or $1.32 annualized, per share. The dividend is payable on November 17, 2021 to shareholders of record as of November 3, 2021. It also reset share buyback program of $1 billion for an additional 3 years beginning in the fourth quarter of 2021. Share repurchases under the previous $1 billion authorization have resumed in the third quarter. Leverage existing LNG infrastructure platform to progress Corpus Christi Stage 3.

Enterprise Products Partners L.P. announced that its operating subsidiary, Enterprise Products Operating LLC priced a public offering of $1.0 billion principal amount of Senior Notes EEE due February 15, 2053. The Senior Notes EEE will be issued at 99.170 percent of their principal amount and will have a fixed-rate interest coupon of 3.30 percent.

Pembina Pipeline announced that its Board of Directors declared a common share cash dividend for September 2021 of $0.21 per share to be paid, subject to applicable law, on October 15, 2021 to shareholders of record on September 24, 2021.

MARKET COMMENTARY

U.S. stock index futures were down, mirroring European shares, as concerns over the pace of economic recovery hurt sentiment. Japan's Nikkei ended at a near six-month high, as investors scooped up cheap stocks. The dollar rose against the euro a day before the European Central Bank policy decision. Oil gained as U.S. Gulf of Mexico producers made slow progress in rebuilding output after Hurricane Ida. Gold prices were in the positive territory.

NASDAQ ENERGY TEAM THOUGHT LEADERSHIP 


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 Tamar Essner


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