Credit: Shutterstock photoThursday, May 24, 2018
Sector Commentary
Energy stocks are set to open the session in the red, with sector equities being weighed on by a more than 1% decline in crude oil prices , and mildly lower broader index futures. News flow is light across the sector, seeming to align with seasonal patterns ahead of the upcoming Memorial Day weekend and the start of the summer driving season.
Oil prices recorded their largest one-day drop in two weeks on Thursday, with expectations building that OPEC will end an output deal that has been in place since the start of 2017 due to concerns about supplies from Venezuela and Iran. "This discussion about possible OPEC supply increases after the June meeting has put a brake on the oil price for the time being, so $80 is a big hurdle to overcome," Commerzbank strategist Carsten Fritsch said. "If prices get above there, that will further intensify and increase the likelihood that OPEC will do something .. It's going to be very difficult to overcome this level on a sustainable basis before the OPEC meeting."
U.S. natural gas futures held near a 3-1/2 month high on Thursday as the market waits for direction from a federal weekly storage report expected to show a slightly higher than usual storage build. The entire 12-month futures strip has increased to $2.95 per mmBtu over the past couple of days, its highest since January 31, while futures for calendar 2019 are now trading higher than every other year through 2023.
INTERNATIONAL INTEGRATEDS
(Late Wednesday) Press Release - The Ontario Court of Appeal has upheld a lower Canadian court's determination that an Ecuadorian judgment against ChevronCorp , already found by U.S. courts to have been obtained through fraud and corruption, cannot be enforced against Chevron Canada Limited, an indirect subsidiary.
Reuters - Equinor Troll C platform is expected to start production in the third quarter of 2019.
Reuters - EU antitrust regulators ended a seven-year-long investigation into Gazprom after the Russian gas giant agreed to reforms aimed at bringing down gas prices and allowing rivals a foothold in eastern Europe.
Reuters - Gazprom exported to countries outside the ex-Soviet Commonwealth of Independent States may rise to 199 billion cubic meters in 2018.
Reuters - Gazprom said that its board of directors has agreed to sell 44 percent in the charter capital of its Gazprom Neft-Vostok subsidiary to United Arab Emirates' Mubadala Petroleum company.
(Late Wednesday) Press Release - Lukoil expects to complete a joint venture for the project on the shelf of Mexico within a month.
Morgan Stanley downgraded Petroleo Brasileiro to 'Equal Weight' from 'Overweight'.
(Late Wednesday) Reuters - Petroleo Brasileiro decided to cut the cost of diesel at its refineries by 10 percent and freeze prices for 15 days to give the government and truck drivers time to negotiate an end to a protest that has crippled the country's transport logistics.
(Late Wednesday) Press Release - Total , Borealis and NOVA Chemicals announced they have closed a joint venture in petrochemicals on the U.S. Gulf Coast after receiving all required regulatory approvals.
U.S. E&PS
Press Release - Enterprise Products Partners and Apache announced they have executed a long-term agreement, with Apache committing 100 percent of its Alpine High natural gas liquids to Enterprise.
(Late Wednesday) Reuters - A court in Aruba lifted the seizures of two oil cargoes that ConocoPhillips sought as part of a move to satisfy a $2 billion arbitration award over the nationalization of its projects in Venezuela.
Press Release - The Board of Directors of Northern Oil and Gas is pleased to announce the hiring of Michael Reger as Chief Executive Officer and Nicholas O'Grady as Chief Financial Officer, and certain other title changes resulting in the following senior executive team.
Suntrust Robinsons upgraded Northern Oil and Gas to 'Buy' from 'Hold'.
OIL SERVICES
Wells Fargo Securities upgraded Oceaneering International to 'Market Perform' from 'Underperform'.
DRILLERS
Wells Fargo Securities upgraded Rowan Companies to 'Outperform' from 'Market Perform'.
MLPS & PIPELINES
Press Release - Enterprise Products Partners and Apache announced they have executed a long-term agreement, with Apache committing 100 percent of its Alpine High natural gas liquids to Enterprise.
Press Release - Seadrill Partners reported operating income of $18.2 million and net loss of $16.3 million. It added that its adjusted EBITDA of $96.9 million. Seadrill announced 10 cent per common unit distribution for the first quarter of 2018.
Press Release - TransCanada announced that the National Energy Board has recommended the federal government approve a variance to the previously issued North Montney Mainline Project certificate, which would allow construction to start on the proposed $1.4 billion natural gas project in northeast British Columbia.
MARKET COMMENTARY
Wall Street futures were little changed as investors remained cautious amidst the ongoing U.S-China trade negotiations. Meanwhile, carmakers became the latest focus of U.S. protectionism worries as a national security investigation launched into auto imports by the Trump administration weighed on shares of global automakers. While Japan's Nikkei ended in the red, dragged down by Nissan, Mazda and Toyota, European markets broadly nudged higher despite the pressure. The dollar's rally lost momentum, while gold prices rose.
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.
