Markets

Oil Prices Higher On Worries Over Supply As US-Iran Tensions Rise

Monday, July 23, 2018

Sector Commentary

Energy stocks are set for a mixed to higher start, tracking gains in the crude complex, while Wall Street's major indexes are little change as investors assessed the impact of an escalating trade conflict between the United States and China and ahead of a busy week for corporate results this week. In company news, oilfield services provider Halliburton quarterly revenue rose 24% to beat analysts' estimates as higher oil prices encouraged U.S. oil and gas producers to put more rigs to work.

Oil prices on both sides of the Atlantic are higher in AM trading, on worries over supply after tensions worsened between Iran and the United States, while some offshore workers began a 24-hour strike on three oil and gas platforms in the British North Sea. Also, Iranian Supreme Leader Ayatollah Ali Khamenei on Saturday backed a suggestion by President Hassan Rouhani that Iran could block Gulf oil shipments if its exports were stopped. The Iranian leadership was responding to the threat of U.S. sanctions after President Donald Trump in May pulled out of a multinational agreement to trade with Tehran in return for its commitment not to develop nuclear weapons.

Natural gas futures slid and are coming off of morning high prices, as record high power demand in Texas over the last week and total US demand tracking towards a new July record was offset by some colder temp forecasts two week's out.

US INTEGRATEDS

Press Release - ExxonMobil said it has increased its estimate of the discovered recoverable resources for the Stabroek Block offshore Guyana to more than 4 billion oil-equivalent barrels and has advanced its evaluation to support a third phase of development and consideration of two additional phases.

INTERNATIONAL INTEGRATEDS

Press Release - Gazprom has increased its natural gas exports to the region of Southeast Europe by 10.3% on the year to 4.196 billion cubic metres in the first quarter of 2018.

(Late Friday) Reuters - Petrobras entered the binding phase for the partial sale of four concessions in the deep off-shore waters of the Sergipe-Alagoas Basin.

Reuters - Total SA was working on Saturday to restart the gasoline-producing fluidic catalytic cracking unit and a hydrotreating unit at its 225,500 barrel per day Port Arthur, Texas, refinery.

U.S. E&PS

(Late Friday) Press Release - Comstock Resources announced that its wholly-owned subsidiary, Comstock Escrow, has priced its previously announced offering of $850 million in aggregate principal amount of 9.75% new senior unsecured notes due 2026. The Senior Notes will bear interest at 9.75% per annum and will be issued at 95.988% of their face value. The sale of the Senior Notes is expected to be completed on or about August 3, 2018, subject to customary closing conditions.

Press Release - Hess Corporation announced an increased estimate of gross discovered recoverable resources for the Stabroek Block, offshore Guyana to more than 4 billion barrels of oil equivalent, up from the previous estimate of 3.2 billion barrels of oil equivalent.

Susquehanna Financial Group dropped coverage of RSP Permian .

Northland Capital Markets dropped coverage of RSP Permian .

Piper Jaffray discontinued coverage of RSP Permian .

Jefferies dropped coverage of RSP Permian .

Guggenheim Securities terminated coverage of RSP Permian .

OILFIELD SERVICES

Press Release - Halliburton announced income from continuing operations of $511 million, or $0.58 per diluted share, for the second quarter of 2018. This compares to reported income from continuing operations for the first quarter of 2018 of $46 million, or $0.05 per diluted share, and adjusted income from continuing operations for the first quarter of 2018 of $358 million, or $0.41 per diluted share, excluding impairments and other charges related to a write-down of all of the Company's remaining investment in Venezuela.

Press Release - Hi-Crush Partners announced that, subject to market conditions, it intends to offer $450 million aggregate principal amount of its senior unsecured notes due 2026 in a private placement to eligible purchasers.

Press Release - Hi-Crush Partners announced that the Board of Directors of its general partner has declared a quarterly cash distribution of $0.75 per unit on all common units, or $3.00 on an annualized basis, for the second quarter of 2018, up from a previous quarterly cash distribution of $0.225 per unit. The distribution will be paid on August 14, 2018, to all common unitholders of record on August 3, 2018.

Press Release - Hi-Crush Partners announced the next steps in extending its position as the most integrated, mine to wellsite supplier of proppant and logistics services through the following strategic and operational updates: Entered into a purchase agreement to acquire FB Industries Inc., a leading manufacturer and marketer of silo-based frac sand management systems for a total initial consideration of approximately $60 million; the transaction is expected to close in the third quarter of 2018.

Press Release - McDermott International announced it has been awarded a sizeable* contract from Samsung Engineering Saudi Arabia Company Ltd. for engineering, procurement and construction of CB&I Storage Tanks for the Jubail United Petrochemical Company Ethylene Oxide Ethylene Glycol Plant No. 3 at Jubail, Kingdom of Saudi Arabia.

REFINERS

(Late Friday) Press Release - The Board of Directors of Valero Energy has declared a regular quarterly cash dividend on common stock of $0.80 per share. The dividend is payable on September 5, 2018, to holders of record at the close of business on August 7, 2018.

MLPS & PIPELINES

Janney Montgomery terminated coverage of Boardwalk Pipeline Partners .

Suntrust Robinson Humphrey downgraded Buckeye Partners to 'Sell' from 'Hold'.

Press Release - Energy Transfer Partners announced it has priced an underwritten public offering of 16,000,000 of its 7.625% Series D Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units at a price of $25.00 per unit, resulting in total proceeds of $400 million.

Press Release - Energy Transfer Partners announced the initial pro-rated quarterly cash distribution of $0.56337 per Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (liquidation preference $25 per Series C unit), which amount is attributable to the partial period from and including the date of original issue. This cash distribution will be paid on August 15, 2018 to preferred unitholders of record as of the close of business on August 1, 2018.

MARKET COMMENTARY

Wall Street indexes were set to open lower as U.S.-China trade tensions escalated after President Donald Trump threatened to impose tariffs on all $500 billion of U.S. imports from China. European stocks declined weighed by Fiat and Ryanair. Japan's Nikkei ended lower on speculation that the Bank of Japan could wind back its exchange-traded fund purchases, while the Japanese yen rallied. Oil rose as tensions worsened between Iran and the U.S. Gold prices were down. Alphabet is scheduled to report quarterly results after markets close.

NASDAQ ENERGY TEAM IN THE NEWS

7/5/2018 - Tamar Essner, energy analyst at Nasdaq Inc., discusses President Donald Trump's efforts to pressure OPEC to increase oil production with Bloomberg's David Westin and Julia Chatterley on "Bloomberg Daybreak: Americas." Watch the interview here:

Saudis the 'Central Bank' of Oil, Nasdaq's Essner Says

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.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.