Oil Inches Higher Amid Tensions in Middle East
SECTOR COMMENTARY:
The energy sector is poised for a mixed to higher start supported by mild strength in the crude complex and in the major equity futures. U.S. stock index futures advanced, a day after the benchmark S&P 500 breached the 5,000-mark for the first time, while investors digested the U.S. Bureau of Labor Statistics' revised inflation figures for 2023. It showed December CPI rose 0.2%, slightly below the initial reading of +0.3%.
WTI and Brent crude oil futures inched higher for the fifth-straight session and remained on track for a weekly gain amid persistent tensions in the Middle East after Israel rejected a ceasefire offer from Hamas. Israeli forces continued deadly air strikeson Gaza, after the bombing of Gaza's southern border city of Rafah on Thursday helped send oil prices up by around 3% in the previous session. Elsewhere, Ukraine launched drone attacks against two oil refineries in southern Russia, resulting in a fireat the Ilsky refinery.
Natural gas futures are extending declines for the fourth-straight day, setting new multi-year lows despite forecasts expecting some colder weather in the coming two weeks.
BY SECTOR:
US INTEGRATEDS
Exxon Mobil said it will exit Equatorial Guinea in the second quarter of this year, when the oil major will transfer its remaining investments in the country to the local government.
A group of religious investors urged Exxon Mobil to drop a lawsuit against climate activists, saying in a letter to the energy company's board seen by Reuters that the action is a broad threat to shareholder rights.
Bloomberg reported that Exxon Mobil asked traders in Brussels to relocate to London, people familiar with the matter said, as the oil giant continues to reorganize its growing trading business.
INTERNATIONAL INTEGRATEDS
SAS has signed a contract extension for three years with Equinor for both domestic and international travel. The contract with Equinor represents a significant contribution to SAS' passenger volume in Norway. SAS was chosen on the basis of an extensive network, attractive timetable, commercial terms and one of Europe's most modern fleets.
Sales from Petrobras in last year's fourth quarter totalled 3.07 million barrels of oil equivalent (boed), the firm said, matching its sales from the year-ago period. The sales cover crude oil, natural gas and refined products, according to a company statement. Petrobras' oil and gas output, meanwhile, reached 2.94 million boed in the final quarter of 2023, or up nearly 11% from the same period a year earlier, company data showed. In late January, the Brazilian oil giant said its total oil and gas output rose 3.7% last year, compared to 2022. The state-run company added that exports increased 11.6% in the October-to-December period last year to reach 885,000 barrels per day.
Renault and Chinese rival Geely expect to finalise a joint venture for their combustion and hybrid engines towards the end of February, two sources close to the matter told Reuters. At the same time, Saudi Aramco is set to announce the signing of a memorandum of understanding to invest in the venture, one of the sources said, a move that would confirm Aramco's letter of intent from March last year.
Shell's Nigeria unit said it has resumed supply of crude oil from its Bonny export terminal to the state-owned refinery in Port Harcourt which is expected to start operations in the first quarter of this year, the company said.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
The board of directors of APA has declared a regular cash dividend on the company's common shares. The dividend on common shares is payable May 22, 2024, to stockholders of record on April 22, 2024, at a rate of 25 cents per share on the corporation’s common stock.
CNX Resources announced its year-end reserves update as of December 31, 2023. The Company reported 2023 total proved reserves of 8,741 Bcfe, comprised of 6,028 Bcfe of proved developed reserves and 2,713 Bcfe of proved undeveloped reserves. Development activity in 2023 converted 819 Bcfe of proved undeveloped reserves, achieving a 1.46x proved developed replacement ratio. Future finding and development costs for proved undeveloped reserves of $0.43 per Mcfe and $0.50 per Mcfe when including midstream and water infrastructure investments. Average EUR of proved undeveloped reserves in Marcellus and Utica shales of 2.57 Bcfe and 2.73 Bcfe per thousand feet of completed lateral, respectively. Upward proved reserves adjustments of 467 Bcfe due to positive well performance and other changes, primarily offset by downward adjustments of 709 Bcfe due to the SEC five-year booking rule and 465 Bcfe due to lower commodity prices.
EQT announced that its Board of Directors declared a quarterly cash dividend of $0.1575 per share, payable on March 1, 2024, to shareholders of record at the close of business on February 20, 2024.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
No significant news.
DRILLERS
No significant news.
REFINERS
HF Sinclair entered into a Stock Purchase Agreement with REH Company (formerly known as The Sinclair Companies), pursuant to which the Company agreed to repurchase from the Selling Stockholder 1,061,946 shares of the Company's outstanding common stock, par value $0.01 per share, in a privately negotiated transaction. The price per share to be paid by the Company under the Stock Purchase Agreement is $56.50 per share resulting in an aggregate purchase price of $59,999,949. The purchase price will be funded with cash on hand. The Stock Purchase Agreement contains customary representations, warranties and covenants of the parties. The shares to be repurchased under the Stock Purchase Agreement will be held as treasury stock by the Company. This share repurchase is the fifteenth privately negotiated transaction between the Company and the Selling Stockholder.
MLPS & PIPELINES
Enbridge reported full year GAAP earnings of $5.8 billion or $2.84 per common share, compared with GAAP earnings of $2.6 billion or $1.28 per common share in 2022. Adjusted earnings were $5.7 billion or $2.79 per common share, compared with $5.7 billion or $2.81 per common share in 2022. Adjusted earnings before interest, income taxes and depreciation and amortization (EBITDA) was $16.5 billion, an increase of 6%, compared with $15.5 billion in 2022. The Company increased the 2024 quarterly dividend by 3.1% to $0.915 ($3.66 annualized) per share reflecting the 29th consecutive annual increase.
Plains All American Pipeline, L.P. and Plains GP Holdings reported fourth-quarter and full-year 2023 results: Fourth-quarter and full-year 2023 Net income attributable to PAA of $312 million and $1.23 billion, respectively, and 2023 Net cash provided by operating activities of $1.01 billion and $2.73 billion, respectively; Delivered strong fourth-quarter and full-year 2023 Adjusted EBITDA attributable to PAA above the top-end of guidance with $737 million and $2.71 billion, respectively; Generated full-year 2023 Adjusted Free Cash Flow (excluding changes in Assets & Liabilities) of $1.60 billion and achieved year-end leverage of 3.1x. The Board approved increasing the annualized common distribution by $0.20 to $1.27 per unit commencing in February 2024, representing a 19% aggregate increase in the annualized distribution versus 2023 levels.
MARKET COMMENTARY 818
U.S. stock index futures edged higher, a day after the benchmark S&P 500 breached the 5,000-mark for the first time, while investors looked ahead to inflation data for hints on the timing of the Federal Reserve's first interest-rate cut. European shares were trading flat, as gains in healthcare stocks and Ubisoft were offset by a rise in government bond yields. Japan's Nikkei index closed higher, after SoftBank Group jumped after the tech investment firm returned to profit for the first time in five quarters. Gold prices were pressured by a firm dollar. Oil prices were little changed with tensions persisting in the Middle East.
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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