Oil Higher on a Weaker Dollar and as More Maritime Carriers Avoid Red Sea
SECTOR COMMENTARY:
The energy sector is set for a higher start, supported by strength in the crude complex. Meanwhile, the major equity futures are mixed after US stocks bounced on Thursday following a largely unexplained late-day selloff in prior session. Headline and core PCE came in a bit cooler than expected for November, fitting with the broader disinflation theme.
WTI and Brent crude oil futures are higher in early trading on a weaker dollar and as more maritime carriers are avoiding the Red Sea due to recent attacks on vessels carried out by the Houthi militant group. Oil contracts are set for a second-consecutive higher week as hundreds of large vessels are rerouting around the southern tip of Africa, a longer route adding 10-14 days of travel, to escape drone and missile attacks by Yemeni Houthis that have pushed up oil prices and freight rates. Elsewhere, OPEC has yet to comment on Angola’s decision to leave the group. Oil-related news is quiet so far today in what should be a low-volume session of trading.
Natural gas futures are flat as preliminary estimates has storage for the week-ending today with a draw of (75) to (85) Bcf vs the 5-year average of (123) Bcf.
BY SECTOR:
US INTEGRATEDS
No significant news.
INTERNATIONAL INTEGRATEDS
Equinor said it has agreed to sell its assets in Azerbaijan to state-owned energy firm SOCAR, including interests in the ACG oilfield and the BTC pipeline for an undisclosed price. Equinor declined to provide the price, but a spokesperson said the company would record a loss from the transaction in the range of $300 million to $400 million as the book value exceeded the transaction's size.
According to Reuters, Petrobras reached deal to sell its stake in Urugua and Tambau Oil Fields to Enauta for $35 million.
Shell and Trinidad and Tobago's National Gas Company (NGC) were awarded a license by Venezuela to develop the 4.2 trillion cubic feet (TCF) Dragon gas project and export its production to the Caribbean nation. The flagship Dragon field, located in Venezuelan waters near the maritime border between the two countries, was put on the table by Venezuela's state company PDVSA about a decade ago when production tests were made and a gas line partially built. But it has not been commercially developed amid lack of partners, investment and, more recently, U.S. sanctions. The license comes two months after the United States eased sanctions on Venezuela, allowing the OPEC country to export crude and natural gas to its chosen markets. Washington had issued a special authorization to Trinidad for Dragon in January and amended it in October to allow Venezuela to receive cash from the gas sales.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
According to Reuters, Libya's NOC to begin drilling new exploration well in partnership with TotalEnergies and ConocoPhillips in Block 31.
According to WSJ, Hess and its bankrupt subsidiary Honx have agreed to pay up to $187 million under a deal to resolve the current and future asbestos claims asserted by the former contractors and employees of an oil refinery in the U.S. Virgin Islands, according to a settlement document filed with the court.
Talos Energy announced that it was named as the apparent high bidder on 13 deepwater blocks comprising approximately 74,000 gross acres (approximately 48,000 net acres) in the U.S. Gulf of Mexico Outer Continental Shelf Federal Lease Sale 261 held by the Bureau of Ocean Energy Management on December 20, 2023. Leases for all blocks remain subject to normal-course, formal award by the Department of the Interior.
Vital Energy announced the acquisition of additional working interests in producing assets associated with the recent asset acquisition from Henry Energy LP, Moriah Henry Partners LLC and Henry Resources LLC for total consideration of $55 million. The purchase will increase Vital Energy’s working interest in 45 wells by an average of 24%, increasing the Company’s estimated 2024 production by approximately 1,400 BOE/d (57% oil). The transaction is expected to increase Vital Energy’s 2024 Free Cash Flow2 by approximately $20 million3, furthering Vital Energy’s deleveraging goals.
ATB Capital Markets reinstated coverage of Crescent Point Energy with Outperform rating and a C$13 price target.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
No significant news.
DRILLERS
No significant news.
REFINERS
Marathon Petroleum President and Chief Executive Officer Michael J. Hennigan announced changes to the executive management team of MPC, effective January 1, 2024. Maryann T. Mannen, executive vice president and chief financial officer of MPC, has been appointed president of MPC. Hennigan will continue to serve as MPC's CEO, as well as the chairman, president and chief executive officer of the general partner of MPLX LP. Succeeding Mannen, John J. Quaid, executive vice president and chief financial officer of the general partner of MPLX, has been appointed executive vice president and chief financial officer of MPC. He also will continue to serve as a member of the board of directors of the general partner of MPLX. Quaid joined MPC in 2014 as vice president and controller and became executive vice president and chief financial officer of the general partner of MPLX in 2021. Prior to joining MPC, Quaid held several roles of increasing responsibility at U. S. Steel.
Par Pacific Holdings announced its 2024 capital expenditure and turnaround outlay guidance with a range of $220 million to $250 million.
MLPS & PIPELINES
No significant news.
MARKET COMMENTARY
U.S. stock index futures dipped on caution ahead of a key inflation report, which could test an eight-week long rally driven by optimism that the Federal Reserve could lower interest rates next year. Data on personal consumption expenditure - the Fed's preferred inflation gauge - is due for release later in the day. European shares inched lower, weighed down by technology and sportswear makers. Hong Kong shares slumped as China's new rules to curb spending on video games dented sentiment. Gold prices rose as the dollar fell. Oil prices rose on tensions in the Middle East following Houthi attacks on ships in the Red Sea.
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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