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Oil Prices Fall After OPEC+ Agreement on Boosting Output

Oil prices extended last week’s decline, down almost 4% this morning after OPEC+ agreed to boost output this weekend, sparking concerns about a crude surplus while COVID-19 infections rise in many countries.

SECTOR COMMENTARY:

Energy stocks are poised to open sharply lower, pressured by steep declines in the crude complex and the major index futures on concerns a rebound in COVID-19 cases would slow global economic growth. The selling in futures increased as the morning progressed with the Dow Jones futures now down about 500 points.

Oil prices extended last week’s decline, down almost 4% this morning after OPEC+ agreed to boost output this weekend, sparking concerns about a crude surplus while COVID-19 infections rise in many countries. "Even with higher output, the market remains relatively tight," ANZ Research said. "High frequency data is showing encouraging signs for oil, with U.S. gasoline demand recently hitting a record high. This should limit the duration of the selling."

Natural gas futures jumped more than 2%, trading at a 30-month high, on soaring global gas prices and forecasts for more air conditioning demand next week than previously expected.

BY SECTOR: 

US INTEGRATEDS  

According to Reuters, Chevron favors permanently closing down the gasoline-producing unit at its 112,229 barrel-per-day (bpd) Pasadena, Texas refinery.

INTERNATIONAL INTEGRATEDS                                               

bp and EnBW submitted their bid for offshore wind acreage in the ScotWind leasing round.

President and Managing Director of VALYNT, Charles Smith officially announced an agreement with ESSCO to supply Saudi Aramco, the oil industry giant, with innovative, patent-pending agents that reduce friction, control viscosity, and improve pipeline material logistics at all midpoints in the distribution chain.

Bristow Group announced four separate two-year contract extensions through April 2024 with Equinor, Shell and Neptune to support its air transportation crew change services for their operations in the Norwegian continental shelf.

CANADIAN INTEGRATEDS    

Credit Suisse upgraded Cenovus Energy to Outperform from Neutral.                       

U.S. E&PS  

MKM Partners upgraded Callon Petroleum to Buy from Neutral. 

Murphy Oil announced that it will redeem $150 million in aggregate principal amount of its 6.875% Senior Notes due 2024 on August 16, 2021, the redemption date for the Notes.

Credit Suisse upgraded Ovintiv to Outperform from Neutral.

Credit Suisse upgraded Range Resources to Neutral from Underperform.

CANADIAN E&PS

No significant news.

OILFIELD SERVICES  

BMO upgraded Nov Inc to Market Perform from Underperform.

 KBR won two recompetes totaling more than $120 million to provide leading-edge engineering services for U.S. Navy training systems and aircraft survivability equipment.

MIND Technology announced that its Seamap unit has received new orders totaling approximately $4.1 million for source controller and GNSS positioning systems. Deliveries of the related products are expected to occur in the third and fourth quarters of the current fiscal year.

PGS completed sale of the hardware, software and intellectual property associated with the Company’s towed streamer Controlled Source Electro Magnetic system to Ocean Floor Geophysics.

U.S. Silica Holdings announced that its Industrial and Specialty Products business will increase prices for most of its non-contracted silica sand, diatomaceous earth and clay products used primarily in glass, foundry, paints, coatings, elastomers, roofing, chemicals, recreation, building products, agricultural, pet litter and other applications.

DRILLERS  

According to a SEC filing, on July 13, 2021, Nabors Industries, Inc. a Delaware corporation and Nabors A.R.F., LLC, a special purpose entity organized under the laws of Delaware, each an indirect subsidiary of Nabors Industries Ltd., together with Wells Fargo Bank, N.A. and Arab Banking Corporation B.S.C., New York Branch, entered into the First Amendment to that certain Receivables Purchase Agreement, dated September 13, 2019, among the Nabors Entities, the Purchasers party thereto, and Wells Fargo as Administrative Agent. The First Amendment amends the Purchase Agreement to, among other things: Extend the term of the Purchase Agreement to the earliest to occur of (i) August 13, 2023, (ii) December 31, 2022, if prior thereto the Company’s existing revolving credit facility is not amended to extend its termination date to at least October 11, 2024 and immediately after giving effect to such amendment the Consolidated Cash Balance of the Company is not at least $220 million, and (iii) July 19, 2022, if on such date any of the 5.5% Senior Notes due 2023 of Nabors Delaware remain outstanding. 

REFINERS    

According to Reuters, PBF Energy shut the reformer at its 190,000 barrel-per-day (bpd) Chalmette, Louisiana, refinery on Friday for work. 

MLPS & PIPELINES 

Brookfield Infrastructure Partners, together with its institutional partners agrees with a leading independent proxy advisor’s recommendation to vote AGAINST the Alternative Transaction. Additionally, Brookfield Infrastructure announces it has filed a fourth notice of variation and change in respect of its offer to acquire all of the outstanding common shares of Inter Pipeline.

Pembina Pipeline announced that the Alberta Securities Commission dismissed, in its entirety, Brookfield's application to terminate Pembina's proposed plan of arrangement with Inter Pipeline and has upheld the break fee that may be paid by IPL to Pembina under that arrangement in certain circumstances.

Pembina Pipeline confirmed that it does not intend to increase or otherwise change the consideration of 0.50 common shares of Pembina offered under its proposed acquisition of all of the common shares of Inter Pipeline pursuant to the arrangement agreement signed by the parties, and unanimously recommended by the board of directors of Inter Pipeline. 

MARKET COMMENTARY 

U.S. stock index futures slipped, as a nationwide spike in new COVID-19 cases renewed concerns regarding an economic recovery ahead of the start of big-tech earnings this week. European shares fell and travel stocks hit lows on worries that the fast-spreading Delta variant could hamper travel demand. Japanese shares ended lower for a fourth straight session as sentiment was hit by worries that the Tokyo 2020 Olympics could worsen the health crisis. Gold prices slipped as investors sought comfort in the U.S. dollar amid rising coronavirus cases. Oil prices fell sharply after OPEC+ overcame internal divisions and agreed to boost output, sparking concerns about a crude surplus.

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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