Oil Prices Higher for Third-Consecutive Session Following Last Week’s Sell-Off
SECTOR COMMENTARY:
The energy sector is poised for a higher start, supported by strength in the underlying commodities and the major market futures. U.S stocks are expected to open in positive territory as better-than-expected earnings from Nike and FedEx helped boost investor confidence in consumer activity.
WTI and Brent crude oil are higher for the third-consecutive session following last week’s sell-off amid API data that reflects a larger-than-expected draw in crude stocks which added to concerns over tight supply. Saudi Arabia’s energy minister said the heavily criticized move by OPEC+ to cut oil output turned out to be the right decision. These comments suggest OPEC+ may continue to keep supply tight. Additionally, the U.S Pipeline and Hazardous Materials Safety Administration has opened an investigation into the issuance of special permits to waive certain operating requirements on pipelines. This comes following the Keystone Pipeline oil spill on December 7th, which has raised eyebrows as Keystone is the only U.S pipeline with a special permit to operate at high pressure. Investors are keeping an eye out for the EIA report that will be released later today as API data reflects crude stocks are down but shows a build-up in gasoline inventories.
Natural gas futures are higher as cold temperatures have frozen oil and gas wells and continue to boost heating demand.
BY SECTOR:
US INTEGRATEDS
No significant news.
INTERNATIONAL INTEGRATEDS
DHL Express Italy, a leader in the express air courier sector, SEA Group, which manages Milan Malpensa and Milan Linate airports, and Eni have signed an agreement to test Eni Biojet, a Sustainable Aviation Fuel (SAF) -- 20% blended with JetA1 and produced exclusively from waste raw materials, animal fat and used vegetable oils -- on 28 flights departing from Malpensa airport.
Power trader Danske Commodities said it had increased its equity with a capital injection of 3.5 billion euros ($3.71 billion) from its parent company Equinor to provide liquidity in volatile energy markets.
Petrobras informed the beginning of the non-binding phase regarding the sale of 100% of its equity interest in Petrobras Operaciones S.A. (POSA), a wholly-owned subsidiary of Petrobras in Argentina and holder of a 33.6% interest in the Rio Neuquén Field.
Petrobras informed that it has concluded the sale of all its stakes in the set of 11 concessions of onshore fields of oil and gas production, with integrated facilities, located in the state of Sergipe, jointly called Carmópolis Custer, to the company Carmo Energy S.A. The value of the sale is US$ 1.1 billion, of which: (i) US$ 275 million has already been paid, as a down payment; (ii) US$ 548 million paid on today's date, closing of the transaction, already considering the adjustments due; and (iii) US$ 275 million in 12 months.
Petrobras informed that it has carried out the payment of the 1st installment of the remuneration to shareholders approved by its Board of Directors in a meeting held on that date. The gross amount distributed corresponds to dividends of R$ 1,67445 per outstanding common and preferred share, based on the shareholding position on November 21, 2022, of which R$ 1.155823 per outstanding common and preferred share as dividends and R$ 0.518627 per outstanding common and preferred share as interest on equity (IOE).
Petrobras informed that it put into operation, this Wednesday (Dec,21), the P-71 platform vessel, installed in the Itapu field, in the Santos Basin presalt area, 200 km off the coast of Rio de Janeiro. The start of production has been anticipated, as it was originally scheduled for 2023.
TotalEnergies and Eni (operator) have made a new gas discovery at the Zeus-1 well, in Block 6, offshore Cyprus. This discovery follows the Calypso-1 and the Cronos-1 discoveries made on the same block respectively in 2018 and August 2022. The Zeus-1 well encountered 105 meters of net gas pay in carbonate reservoirs that re-enforces the promising outlook for the area and its development.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
No significant news.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
Granite has been awarded an approximately $174 million contract by the City of Los Angeles and Los Angeles World Airports (LAWA) to construct new exit taxiways and reconstruct sections of existing runways. The project will be funded by LAWA’s Capital Improvement Plan (CIP) and Federal Aviation Administration (FAA), and is expected to be included in Granite’s fourth quarter CAP.
DRILLERS
No significant news.
REFINERS
Harvest Midstream announced an agreement with Phillips 66 to purchase the Belle Chasse Terminal, formerly the Alliance Refinery located in Plaquemines Parish, Louisiana. The acquisition is expected to close in the First Quarter of 2023.
MLPS & PIPELINES
Frontline announced that a Special General Meeting of Shareholders was held on December 20, 2022. The proposals were all approved by Frontline’s shareholders at the Special General Meeting: To approve an increase of Frontline’s authorized share capital from $500,000,000 (divided into 500,000,000 ordinary shares, par value $1.00), to $600,000,000 (divided into 600,000,000 ordinary shares, par value $1.00), by the creation of an additional 100,000,000 ordinary shares, par value $1.00, with such newly created ordinary shares to be of the same category and have the same rights and to rank pari passu with the existing ordinary shares in all respects. Frontline’s shareholders have approved the Redomiciliation of the Company to the Republic of Cyprus under the name of Frontline plc.
As per SEC filing, Kinder Morgan, as borrower, entered into (i) a first amendment to its $3.5 billion Revolving Credit Agreement with the lenders listed on the signature pages to such agreement and Barclays Bank PLC, as administrative agent, dated as of August 20, 2021 and (ii) a second amendment to its $500 million Revolving Credit Agreement with the lenders listed on the signature pages to such agreement and Barclays, as administrative agent, dated as of November 16, 2018. The amendment to the 2021 Credit Facility provides, among other things, for replacement of LIBOR-based provisions with term SOFR provisions, related updates to benchmark replacement provisions, and extension of the maturity date from August 2026 to August 2027. The amendment to the 2018 Credit Facility provides, among other things, for replacement of LIBOR-based provisions with term SOFR provisions and related updates to benchmark replacement provisions.
Reuters reported that TC Energy has submitted its plan to restart the Keystone pipeline to U.S. regulators, a source familiar with the matter said, nearly two weeks after the line ruptured in the worst oil spill in the United States in nine years.
Reuters reported that the U.S. pipeline regulator launched a review this year of its special permits that waive certain operating requirements for pipelines, following a government report into spills on TC Energy's Keystone oil pipeline, a source familiar with the matter said.
MARKET COMMENTARY
U.S. stock index futures rose and European shares edged up as upbeat quarterly results from Nike lifted the market sentiment. Investors will keenly watch out for consumer confidence and home sales data scheduled for release later today. Japan’s Nikkei ended lower, a day after the country's central bank shocked markets with a shift in its yield curve control policy. The dollar firmed, hurting gold prices. Data suggesting a larger-than-expected draw in U.S. crude stockpiles pushed oil prices higher.
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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