Oil Prices Dip on New Inflation Data
Energy stocks and broader equities took a steep slide lower after 8:30 AM ET September CPI showed a larger than expected increase in prices, signaling the Federal Reserve will not be relenting any time soon on its monetary tightening. Consumer prices rose 0.4% in September, more than the 0.3% estimates, and on a 12-month basis, inflation rose 8.2%, off its peak around 9% in June, but still hovering near the highest levels in 40 years. The 10-year treasury yield soared through 4%, and is now up 3.1% to ~4.025%. S&P 500 futures were off by 2.0% as of 8:55 AM ET.
Oil and natural gas prices are lower, tracking the risk-off sentiment. Prices were higher overnight, finding continued support from an OPEC+ decision last week to cut supplies, as the International Energy Agency warned that those cuts may push the global economy into recession. However, all risk assets reacted negatively immediately to the inflation data.
BY SECTOR:
US INTEGRATEDS
Chevron expects high European prices for liquefied natural gas (LNG) to attract a majority of U.S. LNG exports in the short term, a top executive told Reuters.
A local representative of France's CGT union told Reuters it would end a strike at Exxon Mobil's Fos-sur-Mer refinery after several weeks, confirming a media report.
INTERNATIONAL INTEGRATEDS
Scotiabank downgraded BP to Sector Perform from Sector Outperform.
Two projects by Enel Green Power and Eni to develop green hydrogen will receive public funding approved by the European Commission under IPCEI Hy2Use. Jointly prepared and notified by 13 EU Member States, this project of common European interests will allocate up to €5.2 billion to support research and innovation, the first industrial application, and the construction of related infrastructure in the hydrogen value chain. South Italy Green Hydrogen, the joint venture set up by the two corporations to move forward with the development of the projects, will be the beneficiary of the funding provided.
Equinor announced that on 10 October at 20:00 local time, the new platform in Brazil, Peregrino C, produced its very first oil. Peregrino phase 2 will extend the Peregrino field life to 2040. Phase 2 adds 250-300 million barrels of oil, while at the same time halving expected CO2 emissions per barrel over the field remaining lifetime.
Repsol takes a further step in its strategic commitment to the circular economy, becoming a reference shareholder in the Spanish company Acteco, which specializes in the collection, management, recycling, and recovery of waste in Spain, after acquiring a 27% stake.
Peter Medlam has been appointed Chief Operating Officer, Repsol Sinopec Resources UK Limited, effective 1st November 2022. Mr Medlam replaces Mr Nicolas Foucart who held the post from August 2018, and brings with him more than 30 years’ experience of working in operations, maintenance and projects across the world.
Shell reported flaring at its 404,000-barrel per day (bpd) Pernis refinery in the Netherlands due to a malfunction at one of the site's installations on Oct. 12.
Shell CEO Ben van Beurden told a Dutch parliamentary panel investigating problems relating to natural gas production at the large Groningen gas field in the Netherlands that the company should have pulled out of the project earlier.
Shell and The Kansai Electric Power Co., Inc. have signed a Memorandum of Understanding, building on their longstanding relationship in LNG. Under this MoU, Shell and Kansai will explore and cooperate on business opportunities in liquid hydrogen (LH2) supply chains in order to promote decarbonisation of the businesses.
In connection with the hearings scheduled before the Paris Civil court today, TotalEnergies regrets that the NGOs involved in the proceedings have refused to participate in the mediation process proposed by the court and accepted by TotalEnergies. Following this refusal, the court decided that the pleadings would take place on December, 7, 2022.
Five workers on strike at TotalEnergies' depot in Dunkirk, northern France, have been ordered back to work on Thursday, a local union representative said, adding the orders had been notified to workers as the country struggles with a petrol supply shortage.
TotalEnergies said conditions were not fulfilled to open talks with all unions in order to put an end to the weeks-long refinery strike in France that is weighing on the petrol supply in the country.
The government is still prepared to launch requisitioning proceedings at a TotalEnergies storage site in northern France if the standoff with the CGT union on strike there does not end, the French energy minister told RMC radio.
TotalEnergies needs to raise its salaries and reach an agreement with the CGT union to end strikes weighing on the petrol supply to the country, French Finance Minister Bruno Le Maire said.
The strikes affecting four refineries of TotalEnergies will continue Thursday, a CGT union representative told Reuters, adding they would also affect one storage site while another charging point for petrol shipments was now open again.
Malaysia's Petronas has signed a production sharing contract with subsidiaries of TotalEnergies and Shell for an ultra-deepwater block located off the coast of Sabah. TotalEnergies EP Malaysia will be the operator, with a 34.9% participating interest, while Petronas Carigali will hold a 40% ,interest, Petronas said.
Siemens has signed a partnership agreement with Automotive Cells Company (ACC) to supply equipment and technology for new factories making batteries for electric vehicles, the German engineering company said. ACC, a joint venture of Stellantis, Mercedes Benz and TotalEnergies, has a plan worth over 7 billion euros ($6.79 billion) to build the three gigafactories with a capacity of 40 gigawatt hours (GWh) each by 2030, to support the growing production of electrified vehicles.
Norwegian police responded to a threat made by telephone against the Nyhamna gas processing plant, one of Europe's largest energy export facilities, and later said the incident had been resolved. The threat came amid heightened concerns about the security of oil and gas infrastructure following suspected sabotage of Russia's Nord Stream gas pipelines to Europe, though plant operator Gassco and offshore producers Shell and Equinor said output had not been interrupted.
CANADIAN INTEGRATEDS
Scotiabank downgraded Imperial Oil to Sector Perform from Sector Outperform.
U.S. E&PS
Dutch gas grid operator Gasunie said its German subsidiary has signed deals related to the development of a new LNG terminal at Brunsbuettel with 8 billion cubic meters of throughput capacity, due to be completed by 2026. In a statement, Gasunie said that CS Gas North SA would build the terminal near Hamburg, and that ConocoPhilips, Ineos, and RWE Supply & Trading have been signed as initial customers.
Scotiabank downgraded Enerplus to Sector Perform from Sector Outperform.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
Seaport Research Partners downgraded Minerals Technologies to Neutral from Buy.
DRILLERS
No significant news.
REFINERS
No significant news.
MLPS & PIPELINES
The Board of Directors of Antero Midstream declared a cash dividend of $0.225 per share for the third quarter of 2022, or $0.90 per share on an annualized basis. The dividend will be payable on November 9, 2022 to stockholders of record as of October 26, 2022.
Gov. John Bel Edwards and the executives of major global energy corporations CF Industries, ExxonMobil and EnLink Midstream announced an "unprecedented" decarbonization collaboration aimed at dramatically reducing industrial CO2 emissions in Louisiana. The announcement - described as a potential business prototype for industrial-scale carbon capture and sequestration projects - was made Wednesday at the State Capitol.
MARKET COMMENTARY
Equity markets nosedived lower after September CPI came in hotter than expected, indicating inflation remains a persistent problem, and the Federal Reserve will remain on its rate-hike trajectory. Asian markets ended in negative territory. The U.S. dollar erased losses and turned higher, while gold prices edged down.
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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