Oil Prices Drop After Data Shows Dip in Chinese Demand
The energy sector is set for a lower start, pressured by weakness in the underlying commodities. U.S. stocks are expected to open slightly higher on hopes of less aggressive interest rate hikes and ahead of Big Tech earnings.
WTI and Brent crude oil are down following the release of Chinese data which disappointed traders that were hoping for signs of rising demand. Although today’s data came in higher than in August, China’s September crude imports of 9.79 million bpd were 2% lower than they were a year ago. Additionally, China suspended in-person schooling and dining-in at restaurants in a district at the center of Guangzhou, stoking concerns about the potential for disruption in the southern Chinese manufacturing hub that's home to about 19 million people. Investors remain cautious about China’s zero-COVID policy and property crises which undermine future growth.
Natural gas futures are down in early trading amid record output and forecasts for milder weather and lower demand than previously expected.
BY SECTOR:
US INTEGRATEDS
HSBC downgraded Chevron to Hold from Buy.
Exxon Mobil shares passed their all-time high on Friday as oil prices resumed their climb and analysts raised their long-term views of top U.S. oil producer's cash flow and earnings outlook.
INTERNATIONAL INTEGRATEDS
HSBC upgraded BP to Buy from Hold.
Equinor will on 24 October, on behalf of the partners, issue a complementary assessment for the Wisting development for public consultation. The complementary assessment provides more details on how the field can be developed and operated in a safe and secure manner.
Petrobras informed the beginning of the non-binding phase regarding the sale of its onshore fiber optic network.
Shell has been selected to participate in the next wave of Qatar’s LNG expansions – the North Field South project (NFS). Shell will obtain a 9.375% participating interest in the 16 Mtpa NFS project – out of a total 25% interest available for international partners. QatarEnergy will hold the remaining 75%.
The strike at the TotalEnergies' Gonfreville and Feyzin refineries have been renewed on Monday, a CGT trade union representative told Reuters.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
Omega Acquisition, an Oklahoma corporation, 100% of the capital stock of which is owned by Harold G. Hamm, the founder and Chairman of the Board of Directors of Continental Resources, commenced a tender offer to acquire all of the outstanding shares of common stock, par value $0.01 per share of the Company, other than: (i) Shares owned by Mr. Hamm, certain of his family members and their affiliated entities; and (ii) Shares underlying unvested Company restricted stock awards (such Shares, together with the Shares referred to in clause (i), the "Rollover Shares"), for $74.28 per share, in cash, without interest and subject to deduction for any required withholding taxes.
Raymond James downgraded Continental Resources to Market Perform from Outperform.
Matador Resources announced that its Board of Directors declared a quarterly cash dividend of $0.10 per share of common stock payable on December 1, 2022 to shareholders of record as of November 10, 2022.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
As per SEC filing, KM&T Investment Holdings, LLC reported a 17.2% stake in Compass Minerals International as of October 18. It intends to designate two investor designees to Compass Minerals International's board of directors.
Kirby announced net earnings attributable to Kirby for the third quarter ended September 30, 2022 of $39.1 million or $0.65 per share, compared with a net loss of $(264.7) million, or $(4.41) per share for the 2021 third quarter. Excluding one-time items related to coastal marine in the 2021 third quarter, adjusted net earnings attributable to Kirby were $10.3 million or $0.17 per share. Consolidated revenues for the 2022 third quarter were $745.8 million compared with $598.9 million reported for the 2021 third quarter.
As per SEC filing, on February 3, 2022, as previously disclosed in the Current Report on Form 8-K filed by Kirby with the Securities and Exchange Commission on February 8, 2022, Kirby entered into a Note Purchase Agreement with a group of institutional investors for the issuance of $300 million of unsecured fixed-rate senior notes. The Note Purchase Agreement provides for the issuance by Kirby of $300 million of unsecured fixed-rate senior notes, consisting of $60 million of 3.46% senior notes and $240 million of 3.51% senior notes, each due January 19, 2033. On October 20, 2022, Kirby issued the $60 million of Series A Notes. The remaining $240 million of Series B Notes are scheduled to be issued on January 19, 2023.
Schlumberger announced its new name—SLB—underscoring the company’s vision for a decarbonized energy future and affirming its transformation from the world’s largest oilfield services company to a global technology company focused on driving energy innovation for a balanced planet. Beginning today, the legacy Schlumberger brand and nearly all of its affiliated brands will become one under the new SLB brand, which introduces a refreshed visual identity, including a new logo for the company—a symbol of where it is today and where it is heading.
As per SEC filing, on October 21, 2022, Select Energy Services, LLC and Select Energy Services entered into a Transition and Separation Agreement and General Release of Claims with Adam R. Law, the Senior Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer of the Company, memorializing the terms of his separation from employment, which shall be effective no later than November 11, 2022.
U.S. Silica Holdings announced that it has completed a $50 million voluntary term loan principal repayment. The debt was retired at a discount to par using excess cash on hand.
DRILLERS
No significant news.
REFINERS
Reuters reported that Marathon Petroleum restarted a coker on Thursday to complete a planned multi-unit overhaul at its 593,000 barrel-per-day (bpd) Galveston Bay Refinery in Texas City, Texas, sources familiar with plant operations said on Friday.
MLPS & PIPELINES
No significant news.
MARKET COMMENTARY
U.S. stock index futures struggled for direction in a volatile trade, while European shares rose, driven by hopes that the Federal Reserve could slow its pace of interest rate hikes. Japan's Nikkei closed below the key 27,000 level, while Hong Kong stocks slid to 13-year lows after Xi Jinping's new leadership team raised fears growth will be sacrificed for ideology-driven policies. Gold retreated as the U.S. dollar climbed. The pound rose as former finance minister Rishi Sunak emerged as frontrunner to become Britain's prime minister. Oil prices fell after Chinese data showed that demand from the world's largest crude importer remained lackluster in September. S&P Global manufacturing, services and composite PMIs Flash data are scheduled for release.
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.
This communication and the content found by following any link herein are being provided to you by Corporate Solutions, a business of Nasdaq, Inc. and certain of its subsidiaries (collectively, “Nasdaq”), for informational purposes only. Nasdaq makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Sources include Reuters, TR IBES, WSJ, The Financial Times and proprietary Nasdaq research.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Other Topics
Energy Commodities
MarketInsite
Nasdaq
Nasdaq’s Marketinsite offers actionable insights on a variety of market-moving topics. Learn from our thought leaders who are driving the capital markets of tomorrow.
Read MarketInsite's Bio