Oil Prices Fall as U.S Fed Holds Rates but Signals Potential Future Hikes
SECTOR COMMENTARY:
Energy stocks will open higher, led by a small rebound in oil prices, and despite fairly sizeable losses in the broader equity benchmark futures prices. Equities are set to continue yesterday’s sell-off, as a more hawkish than expected tone struck by Fed Chair Jerome Powell signaled that rates will remain higher for longer. News flow is beginning to slow as quarter-end nears and quiet periods ahead of earnings approach.
Oil prices fell on Thursday, after posting the largest decline in a month in the previous session, as the U.S. Federal Reserve held rates but signaled potential future hikes, offsetting the impact of drawdowns in U.S. crude stockpiles. Energy markets reacted little to data from the EIA on Wednesday showing crude inventories fell in line with expectations last week, with some analysts saying the 2.14 million barrel decline versus an expected 5.25 million barrel draw was smaller than they expected. "The disappointing inventory drawdown gave impetus for traders to lock in profits following the 10% gain since the start of the month," ANZ analysts said in a note.
Natural gas futures are lower by 1% on cooler than expected late season temperatures, while weekly inventory data is expected to show a build of 67 bcf.
BY SECTOR:
US INTEGRATEDS
Chevron accepted the recommendations made by Australia's industrial tribunal the Fair Work Commission to end an ongoing dispute with unions at its liquefied natural gas (LNG) facilities in Western Australia, a spokesperson for the company said on Thursday. "We have informed the Commissioner of our position and written to the unions and other employee bargaining representatives confirming our acceptance," the spokesperson said.
Exxon Mobil expects its motor fuels and chemicals earnings to reach $16 billion by 2027, up about $4 billion from current levels as demand continues to rise, executives said.
INTERNATIONAL INTEGRATEDS
According to Bloomberg, Eni SpA is negotiating with banks on a €3 billion ($3.2 billion) revolving credit facility, a move that could give the company more flexibility in managing its cash needs to fund operations. The new credit line could be used to renew expiring debt facilities or to access more cash for operations as part of a regular liquidity management process, according to people familiar with the matter, who asked not to be named discussing confidential deliberations.
Equinor, on behalf of the BM-C-33 consortium, submitted to Agência Nacional de Petróleo, Gás Natural e Biocombustíveis (ANP), the Declarations of Commerciality and Plans of Development for two fields in the BM-C-33 concession in Brazil's Campos Basin. Equinor (operator) is partnered with Repsol Sinopec Brasil and Petrobras in the consortium. The concession is located approximately 200 kilometers from Rio de Janeiro, in water depths up to 2900 meters. It contains natural gas and oil/condensate recoverable volumes of above one billion barrels of oil equivalent.
Shell said it is seeking partners to invest in renewable assets developed and operated by its Indian business Sprng Energy as part of CEO Wael Sawan's effort to boost profits. Sprng, which Shell acquired from Actis in August 2022 for $1.55 billion, develops and supplies solar and wind power to electricity distribution companies in India, seen as a major growth market in the power sector in the coming decades.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
No significant news.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
No significant news.
DRILLERS
Nauticus Robotics announced it has entered into a senior secured term loan agreement with existing stakeholders, Transocean, ATW Partners, Material Impact, and RCB Equities. The Term Loan Agreement provides Nauticus with up to $20 million in secured term loans, of which $11.6 million has already been funded.
REFINERS
No significant news.
MLPS & PIPELINES
EXMAR NV noted that on 20 September 2023 it has received a letter from SAVEREX NV requesting that the Board of Directors of EXMAR NV convenes a Extraordinary and a Special General Shareholders' Meeting with the agenda items and proposed decisions attached to the letter.
MARKET COMMENTARY
U.S. stock index futures declined as growth stocks took a hit from a jump in Treasury yields after the Federal Reserve held interest rates steady while hinting at another hike this year. Overnight Wall Street losses weighed on European shares while London stocks were little changed after the Bank of England held interest rates steady at 5.25%. Japan's Nikkei ended more than 1% lower. Gold extended its decline, weighed by the surge in the dollar and bond yields.
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 Rich Pontillo.
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Nasdaq Advisory Services Energy Team is part of Nasdaq's Advisory Services. 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.
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