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Markets

Oil Prices Lower In Early Morning Trading

Monday, July 02, 2018

Sector Commentary

Energy stocks are poised for a lower start, sliding on the backs of declining U.S. stock index futures and lower commodity prices. U.S. stock index futures were lower on the first trading day of the second half of this year, as worries of a trade war between the United States and other major economies did not let up. Trade war worries were also being compounded by a threat from the European Union to hit the United States with almost $300 billion in retaliatory tariffs.

Oil prices on both sides of the Atlantic are lower in AM trading, as supplies from Saudi Arabia and Russia rose while economic growth stumbled in Asia amid an escalating trade dispute with the United States. Russian average monthly oil output exceeded 11 million barrels per day in June for the first time since April 2017 as leading global oil producers started to ease output curbs, Energy Ministry data showed. Top oil exporter Saudi Arabia also boosted supply to 10.70 million barrels per day in June, close to a record high.

Natural gas futures are coming off their morning highs and are currently testing what has been a level of support going back to the end of May, while forecasts continue to expect above-seasonal temperatures for key consuming regions.

INTERNATIONAL INTEGRATEDS

Reuters - Eni increased its Norwegian presence with Northern Oil and Gas announced that it has entered into a definitive agreement to acquire producing assets in the Williston Basin of North Dakota. a view to extracting more offshore oil on Monday by merging its subsidiary there with privately-owned Point Resources.

Reuters - Gazprom said its gas output had risen to 253 billion cubic metres, up 8.7 percent year-on-year in the first half of 2018.

(Sunday) Press Release - Petroleo Brasileiro informed that its Board of Directors, approved the Sale and Purchase Agreement for the full sale of Petrobras' stake in the companies Petrobras Paraguay Distribucion Limited, Petrobras Paraguay Operaciones y Logistics SRL and Petrobras Paraguay Gas SRL to Grupo Copetrol.

U.S. E&PS

Reuters - Eni increased its Norwegian presence with Northern Oil and Gas announced that it has entered into a definitive agreement to acquire producing assets in the Williston Basin of North Dakota. a view to extracting more offshore oil on Monday by merging its subsidiary there with privately-owned Point Resources.

(Sunday) Press Release - Northern Oil and Gas announced that it has entered into a definitive agreement to acquire producing assets in the Williston Basin of North Dakota.

OILFIELD SERVICES

(Late Friday) Press Release - Core Laboratories continues to expect quarterly sequential improvements throughout 2018 in revenue, operating margins, profits and EPS; however, due to delays in revenue opportunities from international activity, Core now projects that second quarter 2018 results will be only slightly higher than experienced in the first quarter. The revised guidance for second quarter revenue ranges from $174,000,000 to $175,000,000 creating an expected EPS of $0.57 to $0.59, exceeding both sequential and year-over-year results. Full Company operating margins are expected to be approximately 20%.

Press Release - OKEA AS and Halliburton announced the companies have signed a well construction services agreement to implement Halliburton Landmark's full suite of software in the iEnergy cloud and field development planning services for all OKEA fields in the Norwegian Continental Shelf.

Press Release - McDermott International announced it has been awarded two sizeable* technology contracts by a subsidiary of PT Chandra Asri Petrochemical Tbk, PT Chandra Asri Perkasa, for the company's planned new petrochemical complex in Indonesia. McDermott's scope of work includes licensing and basic engineering packages for Lummus Technology's olefins technology, including Short Residence Time ethylene heater design and critical supply, and for butadiene extraction technology.

Citigroup downgraded TechnipFMC to 'Neutral' from 'Buy'.

Reuters - TechnipFMC has been awarded a contract by Total E&P Angola for the Zinia Phase 2 field development, located offshore Angola at a water depth between 800 and 1,000 meters.

Press Release - TETRA Technologies and Halliburton announced they entered into a global joint marketing and development agreement for the sale and distribution of TETRA's proprietary family of TETRA CS Neptune completion fluids. The collaborative agreement also fosters and drives further development of other oil and gas drilling and completion fluids based on their respective technologies and resource capabilities.

DRILLERS

Press Release - Ocean Rig UDW Inc. announced that its subsidiary that is party to the shipbuilding contract for the construction of its 8th generation enhanced integrated design newbuilding drillship, the Ocean Rig Crete, reached an agreement with Samsung Heavy Industries to postpone the delivery of the Ocean Rig Crete to September 2020.

(Saturday) Press Release - Transocean Ltd , a provider of offshore contract drilling services, through its wholly-owned subsidiary Transocean Guardian Limited, priced the private placement of 5.875% senior secured notes, due 2024, for gross proceeds of US$750 million.

MLPS & PIPELINES

(Late Friday) Press Release - Loews Corporation announced today that Boardwalk GP, LP, the general partner of Boardwalk Pipeline Partners, LP and an indirect wholly-owned subsidiary of Loews, has elected to exercise its right to purchase all of the issued and outstanding common units representing limited partner interests in the Partnership not already owned by the General Partner or its affiliates pursuant to Section 15.1(b) of the Partnership's Third Amended and Restated Agreement of Limited Partnership, as amended.

Reuters - CPC Corp announced a preliminary deal to buy liquefied natural gas from Cheniere Energy for 25-years. CPC signed a Heads of Agreement to purchase 2 million tonnes of LNG annually from Cheniere, which is gearing up to start exports from its second U.S. export plant at Corpus Christi, Texas.

Press Release - NuStar Energy announced the initial closing of the issuance of $400 million of Series D Cumulative Convertible Preferred Units representing limited partner interests in the Partnership to investment funds managed by EIG Management Company, LLC and FS/EIG Advisor, LLC, the advisor to FS Energy & Power Fund. The purchasers have agreed to purchase the remaining $190 million of Preferred Units at a second closing, scheduled to occur on July 13, 2018.

MARKET COMMENTARY

Wall Street indexes were poised for a lower opening as a lingering global trade battle dealt a blow to investor sentiment. European stocks traded lower due to political tensions in Germany and weak euro zone manufacturing growth numbers. Asian markets fell as the June 6 deadline to impose U.S. tariffs on Chinese exports nears. The euro rose against the dollar and gold was down. Oil prices fell on rising Saudi Arabian and Russian supply. Manufacturing PMI for June and construction spending numbers for May are due for release.

NASDAQ ENERGY TEAM IN THE NEWS

Tamar Essner, Nasdaq Corporate Solutions Energy Director sits down with Bloomberg TV's Ramy Inocencio to discuss this week's OPEC meeting and the implications for oil production and prices. Watch the Bloomberg TV Daybreak: Australia interview here .

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.