Oil

Oil Pares Gains Following OPEC Report

Oil prices on both sides of the Atlantic are up in morning trading, tracking gains in the broader index futures, but off earlier highs after the OPEC monthly report was released.

SECTOR COMMENTARY

Energy stocks are poised for a higher start, tracking gains in the crude complex and U.S. stock index futures which rose ~1% as hopes of more stimulus from central banks lifted investor sentiment in what has been a turbulent week for markets.

Oil prices on both sides of the Atlantic are up in morning trading, tracking gains in the broader index futures but off earlier highs after the OPEC monthly report was released. OPEC lowered 2019 global oil demand growth expectations though that was offset by a larger non-OPEC supply growth cut this year. OPEC said the "outlook for oil market fundamentals seems somewhat bearish for the rest of the year given softening economic growth, ongoing global trade issues and slowing oil demand growth, it remains critical to closely monitor the supply/demand balance and assist market stability in the months ahead."

Natural gas futures are off 1.5%, after marking a 4.2% gain yesterday following the weekly storage update from the EIA that beat consensus and was in line with the 5 year average. Record electricity demand in Texas earlier in the week will be supportive for storage data week-ending today while record production and recovering LNG feedgas flows are offsetting factors. Additionally, Northeast and Midwest forecasts next week are expected to be warmer-than-average which should increase cooling demand.

U.S. INTEGRATEDS

Reuters - ExxonMobil restarted a crude distillation unit (CDU) on 8/15 at its 502,500 barrel per day (bpd) Baton Rouge, Louisiana, refinery. The 90,000 bpd PSLA 8 CDU was shut on 8/14 by an unplanned shutdown of the unit's furnace and required 24 hours to restore production.

Reuters - ExxonMobil Asia Pacific has signed a two-year time charter agreement with Singapore-based Sinanju Tankers Holdings Pte Ltd to lease Singapore's first liquefied natural gas (LNG) powered bunker tanker. The 7,990 deadweight tonnage (dwt) new build will be the first LNG bunker tanker for Singapore and Sinanju and will deliver ExxonMobil's new Engineered Marine Fuels (EMF.5) to ocean-going vessels within Singapore port limits from the first quarter of next year.

INTERNATIONAL INTEGRATEDS

Reuters - Petroleo Brasileiro SA Petrobras kicks off binding phase to sell Breitener Energetica.

Reuters - Petrobras Distribuidora, a subsidiary of Petroleo Brasileiro SA Petrobras, said it will sell its non-core asset, Stratura Asfaltos.       

U.S. E&PS

(Late Thursday) Press Release - Sundance Energy Australia reported its second quarter 2019 financial and operations results. The company reported total revenue for the quarter increased ~84% to US $52.9 million as compared to the same prior year period. Net Income attributable to owners of the Company for the period was US $3.8 million. Adjusted EBITDAX for the period was US $33.7 million, representing a ~64% Adjusted EBITDAX margin and ~230% growth as compared to the same period for the prior year.  Adjusted EBITDAX for the quarter was slightly below the Company’s guidance primarily due to the lower oil cut and the impact of realized NGL and gas prices.

Wells Fargo downgraded Whiting Petroleum to ‘Market Perform’ from ‘Outperform.’

OILFIELD SERVICES

(Late Thursday) Press Release - On August 11, 2019, Admiral Samuel J. Locklear III, a current member of the Board of Directors of Fluor, and of the Governance and Audit Committees, notified the Corporation of his decision to resign from the Board, effective August 11, 2019. On August 12, 2019, Mr. Nader H. Sultan, a current member of the Board, and of the Governance and Audit Committees, notified the Corporation of his decision to resign from the Board, effective August 12, 2019. And on August 15, 2019, the Board voted to decrease the size of the Board from twelve to ten members, effective August 15, 2019.

DRILLERS

(Late Thursday) Press Release - Seadrill and Gulf Drilling International have entered into a 50:50 joint venture, GulfDrill, which will initially manage and operate five premium jackups in Qatar with Qatar Petroleum commencing throughout 2020. The five firm well based contracts will have staggered commencements throughout 2020 with initial terms concluding in 2023 & 2024 respectively. The total contract value is expected to be $656 million (including mobilization fees). Each contract has five single well options which could add up to an estimated 13.7 cumulative years of term and an additional contract value of $700 million.

MARKET COMMENTARY 

U.S. stock futures rose, tracking global equities, as expectations grew of further stimulus by central banks, offsetting worries about slowing economic growth. The dollar was higher against a basket of major currencies, whereas gold prices fell as investors locked in profits. Oil prices were trading in the positive territory. U.S. housing data is on the economic tap.

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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