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Oil

Oil Prices at One-Week High Supported by U.S. Output Concerns

Oil prices on both sides of the Atlantic are higher and trading at a one-week high, supported by concerns over shut output in the US because of damage from Hurricane Ida, while analysts expect prices to remain rangebound in a stable market over the coming months.

SECTOR COMMENTARY:

Energy stocks are poised for a higher start, backed by gains in the underlying commodities while the main index futures point to a strong open for the broader markets. News flow is rather quiet as investors continue to monitor covid developments and the impact on crude production due to tropical storms. 

Oil prices on both sides of the Atlantic are higher and trading at a one-week high, supported by concerns over shut output in the US because of damage from Hurricane Ida, while analysts expect prices to remain rangebound in a stable market over the coming months. Goldman Sachs on Friday said Ida was having a larger impact on oil production compared to refinery demand, causing a net bullish impact on US global storage stockpiles. Meanwhile, tropical storm Nicholas, with sustained winds of 60 mph, is expected to make landfall near Corpus Christi later today or early tomorrow. China on Monday said it will announce details of planned crude oil sales from strategic reserves in due course.

Natural gas futures are up 2.9% to $5.083, after posting its highest close Friday in over 7 years, as forecasts over the weekend turn warmer while GoM shut-ins due to Ida continued. The NOAA 6-10 day forecast Sunday afternoon puts a high probability on above-seasonal temperatures occurring everywhere East of the Rocky Mountains. 

BY SECTOR:

US INTEGRATEDS 

The U.S. Department of Energy’s Office of Fossil Energy and Carbon Management announced that contracts have been awarded from the recent Congressionally-mandated Strategic Petroleum Reserve crude oil sale. On August 23, 2021, DOE issued a Notice of Sale for a price-competitive sale of up to 20 million barrels of SPR crude oil. A total of 15 companies responded and 104 bids were submitted for evaluation. Contracts were awarded to the following eight companies: Atlantic Trading & Marketing, Chevron USA, ExxonMobil OilMarathon Petroleum Supply and Trading, Motiva Enterprises, Phillips 66, Unipec America, and Valero Marketing and Supply Company.

INTERNATIONAL INTEGRATEDS

According to ReutersRoyal Dutch Shell said its Enchilada/Salsa and Auger assets in the Gulf of Mexico were back online after it was shut due to Hurricane Ida. "Our Enchilada/Salsa and Auger assets are now back online," Shell said in a statement late on Friday about the facilities southwest of New Orleans, while its Appomattox, Mars, Ursa, and Olympus facilities remain shut. Damage assessments continued at its West Delta-143 (WD-143) offshore facility, the company said. 

According to ReutersSaudi Aramco notified at least four north Asian buyers that it will supply full contractual volumes of crude oil in October, sources with knowledge of the matter said on Monday. None of the four buyers have asked for additional supplies, they added.

CANADIAN INTEGRATEDS 

No significant news.

U.S. E&PS

Tudor Pickering Holt upgraded EOG Resources to Buy from Hold.

CANADIAN E&PS

Crescent Point Energy approved an increase to the Company's quarterly dividend as a result of significant progress made on improving its balance sheet strength and sustainability. Crescent Point also announced its preliminary 2022 budget, which is expected to generate significant excess cash flow that leads to additional balance sheet strength and the opportunity to create further shareholder value. Crescent Point's Board of Directors has approved and declared a fourth quarter dividend increase to $0.03 per share to be paid on January 4, 2022 to shareholders of record on December 15, 2021. This equates to an annualized dividend of $0.12 per share, an increase of $0.11 per share from the current level. The Company's upcoming third quarter dividend of $0.0025 per share is scheduled to be paid on October 1, 2021, as previously announced. Based on its initial budgeting process and the current outlook for commodity prices, Crescent Point is expecting to generate annual average production of 131,000 - 135,000 boe/d in 2022 based on development capital expenditures of $825 - $900 million. Crescent Point's preliminary 2022 budget is expected to generate significant excess cash flow, after dividends, of approximately $625 - $875 million at US$65/bbl - US$75/bbl WTI.

OILFIELD SERVICES

No significant news.

DRILLERS

No significant news.

REFINERS

No significant news.

MLPS & PIPELINES

Cheniere Energy Partners announced that it intends to offer, subject to market and other conditions, $1.2 billion principal amount of Senior Notes due 2032.

Gibson Energy announced that Ms. Juliana Lam joined the Company's Board of Directors effective September 10, 2021.

MARKET COMMENTARY

Wall Street futures were higher, with major indexes set to recover slightly from steep losses last week as investors remained uncertain over the direction of monetary policy and slowing economic growth. European shares rose on hopes of a strong euro zone economic recovery. Japan’s Topix index hit a fresh three-decade high. The dollar gained as expectation grows that the Fed could taper its stimulus sooner rather than later. Oil was up on U.S. supply concerns. Gold prices were little changed.

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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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