Motley Fool Oil rigs
Oil

Oil Prices Gain as Prospect of Immediate Iran Supply Fades

Oil prices are up nearly 1% with Brent gaining for a fourth consecutive session, as the prospect of extra supply coming to the market soon from Iran faded with talks with the US dragging on and with a delay ahead of Iranian elections.

SECTOR COMMENTARY: 

Energy stocks are trending higher in the pre-market as U.S. stock futures were flat on ahead of the Federal Reserve’s latest monetary policy meeting. The pause comes a day after the Nasdaq Composite and S&P 500 registered new record highs.  A nearly 7% jump in producer prices this morning stoked concerns about inflation which benefitted hard assets such as oil.

Oil prices are up nearly 1% with Brent gaining for a fourth consecutive session, as the prospect of extra supply coming to the market soon from Iran faded with talks with the US dragging on and with a delay ahead of Iranian elections. WTI is at new highs not seen since October of 2018 and Brent is at the highest level since May of 2019.  While oil traded into further overbought territory from a technical level, several market observers projected more upward momentum in prices.  Trafigura CEO said there was a chance we could see $100 oil.  Goldman Sachs said they wouldn't rule out $100 oil.

Natural gas is down fractionally after posting its highest close yesterday since the fall.  Preliminary estimates for EIA weekly storage data due Wednesday has a build of around +76 Bcf which compares to the 5 yr average of +87 Bcf.

US INTEGRATEDS

Reuters reported that the U.S. Supreme Court rejected a bid by Chevron Corp, BP Plc and other major oil companies to have the court weigh in on their attempts to keep lawsuits over their contributions to climate change in federal court.

INTERNATIONAL INTEGRATEDS

Eni signed an agreement with the Arab Republic of Egypt, the Egyptian General Petroleum Corporation) and Lukoil for the merger of the concessions of Meleiha and Meleiha Deep, in Egypt's Western Desert, and their extension to 2036, with the possibility of reaching further to 2041.

According to ReutersRepsol created artificial intelligence consortium in Spain together with Gestamp, Navantia, Tecnicas Reunidas, Telefonica and Microsoft.

According to ReutersRoyal Dutch Shell offered a Peru liquefied natural gas (LNG) cargo for delivery in August, two industry sources said. Shell offered the cargo on the Global LNG Exchange (GLX), a LNG trading marketplace, they said. The cargo will be loaded on the tanker SCF Timmerman and is for delivery into North Asia over August 21 to 25, one of them said. The tender closes on June 15. 

GasLog Partners announced two new time charter agreements with leading global energy producers. The agreements include a one-year time charter for the GasLog Sydney with a subsidiary of Total S.A., beginning this week, as well as an approximately 8-month time charter for the Solaris with a subsidiary of Royal Dutch Shell beginning immediately following the conclusion of its initial multi-year charter with Shell in late July 2021 and extending through the end of Q1 2022.                       

U.S. E&PS

Comstock Resources announced the pricing of its private placement of new 5.875% senior unsecured notes due 2030 in the aggregate amount of $965 million, which was increased from the originally proposed $500 million offering. The notes were sold at par. The offering is expected to close on June 28, 2021, subject to customary closing conditions.

CANADIAN E&PS

Scotiabank upgraded Peyto Exploration & Development to Sector Outperform from Sector Perform.

OILFIELD SERVICES

Petrofac has made a senior UK appointment to support the continued growth of its offering in the new and renewable energy sectors. Anne Haase, who joins Petrofac as Business Development Director, will spearhead the Group’s Operations and Maintenance focus for new and renewable energy. Anne will build on Petrofac’s Operations and Maintenance (O&M) capability in Wind, Carbon Capture Usage and Storage (CCUS), Hydrogen and Waste to value.

SECURE Energy Services announced that it has entered into a binding agreement with its syndicate of lenders to increase the size of the previously announced senior secured revolving credit facility available at closing of the business combination with Tervita Corporation from $725 million to $800 million.

DRILLERS

According to SEC filing, on June 14, 2021, Transocean entered into an Equity Distribution Agreement with Jefferies. Pursuant to the terms of the Agreement, Transocean may offer and sell its shares, par value CHF 0.10 per share from time to time through the Manager, as Transocean’s sales agent for the offer and sale of the shares, up to an aggregate offering price of $400,000,000. Sales of the shares, if any, will be made by means of ordinary brokers’ transactions on the New York Stock Exchange, to or through a market maker or directly on or through an electronic communications network at market prices, in negotiated transactions or as otherwise permitted by law.

REFINERS

Marathon Petroleum announced the preliminary results of its "modified Dutch auction" tender offer, which expired at midnight, New York City time, at the end of the day on June 14, 2021. Based on the preliminary count by Computershare Trust Company, N.A., the depositary for the tender offer, a total of approximately 15.6 million shares of MPC's common stock were validly tendered and not validly withdrawn at or below a purchase price of $63.00 per share, including approximately 10.4 million shares that were tendered through notice of guaranteed delivery. These shares represent approximately 2.4% of MPC's outstanding common stock as of May 3, 2021. 

MLPS & PIPELINES

Jones Trading initiated coverage of BP Midstream Partners with a Buy rating.

Pembina Pipeline announced a mid-year business update, including delineation of its extensive runway of development opportunities, which collectively highlight the Company's strong momentum as it builds one of the largest and most integrated midstream energy companies in North America.

TC Energy announced the appointment of a new independent director, William D. (Bill) Johnson, effective June 14, 2021.

MARKET COMMENTARY

U.S. stock index futures were little changed, as investors maintained a cautious stance ahead of the Federal Reserve’s meeting. European shares rose on optimism of a speedy economic recovery. Japanese shares closed higher, buoyed by technology and growth-oriented stocks, while drug makers extended their gains. The dollar edged higher. Gold prices were mixed. Oil prices rose, amid optimism that demand will recover rapidly in the second half of this year. Producer price index, retail sales and industrial production data will be released later in the day. 

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


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.

MarketInsite

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