Oil Higher as Traders Remain Optimistic Over the Future Demand for Crude
SECTOR COMMENTARY:
The energy sector is poised for a higher start, supported by strength in the major equity futures which have bounced following yesterday’s sharp losses.
WTI and Brent crude oil futures are higher for the eighth-consecutive day as traders remain optimistic over the future demand for crude following yesterday’s OPEC+ forecasts and as geopolitical tensions abroad remain heightened. After the close yesterday, Iran announced it had conducted several military exercises including the successful launch of a long-range ballistic missile from a warship. Last night’s API report showed a crude build of 8.5 million barrels, which was sharply higher relative to analyst estimates. Market participants will be keeping an eye out for today’s EIA Weekly Petroleum Status Report due later today and tomorrow’s IEA monthly oil report. Elsewhere, Iraqi Prime Minister Mohammed Shia al-Sudani held a meeting with Saudi Energy Minister Prince Abdulaziz bin Salman, in which he highlighted the importance of coordination between the two countries to maintain stability in oil markets.
Natural gas futures are extending losses for the seventh-consecutive session as the NOAA’s 6-10 and 8-14-day forecasts yesterday afternoon both turned warmer. Ample levels of fuel storage and LSEG estimates which point to lower demand for next week also put pressure on futures tied to natural gas.
BY SECTOR:
US INTEGRATEDS
Shell and ExxonMobil have asked an arbitration court to decide whether the Dutch state should compensate them for the ending of gas production at the large Groningen field in the north of the Netherlands.
INTERNATIONAL INTEGRATEDS
ADNOC and BP announce that they have agreed to form a new joint venture in Egypt. The JV (51% bp and 49% ADNOC) will combine the pair’s deep technical capabilities and proven track records as it aims to grow a highly competitive gas portfolio. As part of the agreement, bp will contribute its interests in three development concessions, as well as exploration agreements, in Egypt to the new JV. ADNOC will make a proportionate cash contribution which can be used for future growth opportunities.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
Comstock Resources reported financial and operating results for the quarter and year ended December 31, 2023. Natural gas and oil sales for the year ended December 31, 2023 totaled $1.3 billion (including realized hedging gains of $80.3 million). Operating cash flow (excluding changes in working capital) generated during the year was $774.5 million, and net income available to common stockholders was $211.9 million or $0.76 per share. Adjusted net income excluding unrealized gain on hedging contracts for the year ended December 31, 2023 was $132.7 million or $0.47 per share.
EQT announced financial and operational results for the fourth quarter and full year 2023 as well as financial and operational guidance for 2024. EQT announced net income of $502 million; EPS of $1.1; Q4 adjusted net income of 214 million and adjusted EBITDA of 840 million.
Matador Resources announced that its Board of Directors declared a quarterly cash dividend of $0.20 per share of common stock payable on March 13, 2024 to shareholders of record as of February 23, 2024.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
Toromont Industries reported its financial results for the three months and year ended December 31, 2023. Revenue increased $98.4 million or 9% in the fourth quarter compared to the similar period last year, with higher revenues in both groups. Equipment Group was up 9% and CIMCO revenue was up 2%. Net earnings from continuing operations decreased $4.2 million or 3% in the quarter versus a year ago to $154.1 million or $1.87 EPS (basic) and $1.86 EPS (fully diluted). For the year, net earnings from continuing operations increased $79.0 million or 18% to $529.1 million, or $6.43 EPS (basic) and $6.38 EPS (fully diluted).
DRILLERS
No significant news.
REFINERS
No significant news.
MLPS & PIPELINES
Williams announced its unaudited financial results for the three and 12 months ended December 31, 2023. Fourth-quarter 2023 Adjusted EBITDA decreased by $53 million from the prior year. Fourth-quarter 2023 Adjusted Net Income decreased by $65 million compared to the prior year. Fourth-quarter 2023 Available Funds From Operations (AFFO) decreased slightly by $34 million compared to the prior year primarily due to lower operating results exclusive of noncash items.
MARKET COMMENTARY
U.S. stock index futures recovered some ground from a sharp sell-off in the previous session, as data showed inflation did not cool as expected, fanning uncertainty on the timing for the Federal Reserve's first interest rate cut in 2024. European shares edged higher, following softer-than-expected UK inflation data. Japan's Nikkei retreated from a 34-year high. In currencies, the dollar weakened against the yen after top Japanese currency officials warned against what they described as rapid and speculative yen moves, while sterling fell. Oil and gold prices were little changed.
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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