Oil Prices Higher For Fourth Consecutive Day Amid Concerns Over Tight Supply
SECTOR COMMENTARY:
The energy sector is set for a mixed to higher start, supported by strength in the crude complex but weakness in the broader equity futures is keeping a cap on sentiment. The major averages are set to open in negative territory following the release of U.S jobs data that came in hotter-than-expected.
WTI and Brent crude oil are higher for the fourth-consecutive day amid concerns over tight supply just as a winter storm hits the United States. The drop in stockpiles as shown in yesterday’s EIA report comes as demand for heating oil is set to soar with a powerful winter storm hitting the United States. The storm is expected to bring sub-zero wind chills as far south as Texas and record-breaking forecast for Florida and the eastern states. In international news, Russian crude oil exports via the Transneft system - including pipelines and key outlets on the Baltic and Black seas as well as on the Pacific Ocean - might drop by 575,000 b/d in the first three months of 2023 compared to what was scheduled for the October-December period.
Natural gas futures slipped lower in early trading as forecasts for warmer weather over the next two weeks in key consuming regions outweigh concerns over the incoming winter storm.
BY SECTOR:
US INTEGRATEDS
No significant news.
INTERNATIONAL INTEGRATEDS
Eni has signed a contract with Wison Heavy Industry for the construction and installation of a Floating Liquefied Natural Gas (FLNG) unit with a capacity of 2.4 MTPA (million tons per annum). The FLNG will be deployed offshore the Republic of Congo.
Petrofac employees working on Repsol installations in the North Sea will take part in a 48-hour strike action from Thursday, Britain's Unite labour union said. In a separate dispute, Petrofac workers at BP will take strike action from Dec. 29-31 at installations including Andrew, Clair, Clair Ridge, ETAP, and Glen Lyon floating production, storage and offloading (FPSO) facility.
Japan Organization for Metals and Energy Security (JOGMEC) has renewed a deal with Saudi Aramco for crude oil storage on the island of Okinawa for another three years, the state-run Japanese company said.
Japan Organization for Metals and Energy Security (JOGMEC) announced that their crude oil storage, throughput, and tank lease agreement has been renewed, in the presence of the Ministry of Economy, Trade and Industry (METI), in Okinawa, Japan, on December 16, 2022. The agreement was signed by JOGMEC and Aramco, based on the renewed agreement between the Agency for Natural Resources and Energy, under METI and Aramco. This joint project began in 2010 and has been renewed every three years.
Shell has suspended production at its Prelude floating LNG site off Western Australia following a fire, which was rapidly extinguished, a Shell spokesperson said.
Spain's competition watchdog fined two natural gas traders a combined 4.8 million euros ($5.1 million) for not meeting deadlines to warn about changes in supplies to Spanish gas grid operator Enagas. The regulator, known as CNMC, said it fined gas trading units of Germany's power utility RWE 3.6 million euros and TotalEnergies 1.2 million euros.
CANADIAN INTEGRATEDS
Suncor Energy issued an all-clear notice after it brought down several units at the 103,000 barrel-per-day Commerce City refinery in Colorado.
U.S. E&PS
SM Energy announced the retirement of Senior Vice President - Operations Newt Newton and Vice President - Human Resources Candace Lyon. The Company also announced the promotions of Tom Morrow to Vice President - Operations Support, Richard Jenkins to Vice President – Operations and Susie Piehl to Vice President - Human Resources. Mr. Morrow will be responsible for operations planning, field EHS and regulatory compliance, facility engineering, supply chain management, measurement and the Midland office. Mr. Jenkins will assume responsibility for Company-wide drilling, completion and production operations and Ms. Piehl will assume oversight of Human Resources. Mr. Morrow, Mr. Jenkins and Ms. Piehl have been with the Company for 16, 12 and 13 years, respectively. All promotions are effective January 1, 2023.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
Chart Industries and Raven SR Inc. a renewable fuels company, today announced their agreement to collaborate globally on the liquefaction, storage, and transportation of hydrogen as well as pure carbon dioxide produced from Raven SR's non-combustion Steam/CO2 Reformation process of converting waste to renewable fuel.
According to Reuters, UK's CMA said it may accept undertakings under Baker HughesNederland Holdings B.V. / Oz Midco as (altus intervention) merger inquiry.
DRILLERS
No significant news.
REFINERS
As per SEC filing, on December 16, 2022, Karen B. Davis, an independent director and Chairperson of the Audit Committee of the Board of Directors of PBF Energy informed the Company that she is resigning from the Board effective as of the close of business on December 31,2022. Ms. Davis’ decision to resign was not the result of any disagreement with the Company or the Board of Directors and she will commence her role as the Company’s interim Chief Financial Officer effective January 1, 2023. On December 19, 2022, the Board appointed Lawrence Ziemba as an independent director effective as of January 1, 2023. In connection with Mr. Ziemba’s appointment, the Board has appointed Mr. Ziemba to the Health, Safety and Environment Committee.
MLPS & PIPELINES
EnLink Midstream, LLC and each of GIP III Stetson I, L.P. and GIP III Stetson II, L.P., the holders of approximately 41.5%, in the aggregate, of the outstanding common units of the Company and, in the case of GIP III Stetson I, L.P., the owner of all of the equity interests in EnLink Midstream Manager, LLC, the managing member of the Company, entered into a Unit Repurchase Agreement pursuant to which the Company agreed to repurchase, on a quarterly basis, a number of Common Units held by the GIP Entities based upon the number of Common Units repurchased from public unitholders by the Company during the applicable quarter under the Company's 2023 common unit repurchase program, as described below. The Repurchase Agreement is substantially similar to the repurchase agreement entered into by the Company and the GIP Entities on February 15, 2022, which provided for proportional repurchases by the Company of GIP Units during 2022, and which agreement will terminate as of December 31, 2022 in accordance with its terms. The Board has authorized a common unit repurchase program for the repurchase of up to $200.0 million of outstanding Common Units during 2023.
MARKET COMMENTARY
Wall Street futures were subdued as market participants cautiously awaited gross domestic product and initial jobless claims numbers, due for release later in the day, to gauge the health of the U.S. economy. European equities struggled for direction, while financial and energy stocks kept losses in check. Shares in Asia rallied, tracking gains on Wall Street in the previous session which was sparked by data showing an upbeat consumer confidence this month. The yen firmed against the dollar, while gold was little changed. Oil prices climbed, after data showed U.S. crude, heating oil and jet fuel inventories fell more than expected.
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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