Oil barrels stacked atop one another
Oil

Oil Prices Rise After Slipping on Weak U.S. Driving Season Data

Oil prices rose on Thursday a day after slipping on data indicating weak U.S. driving season fuel demand as investors eyed upcoming U.S. economic data.

SECTOR COMMENTARY:

Energy stocks are set to open higher, tracking further strength in crude oil prices, which continue to garner support around multi-year highs.  A handful of ratings changes in the E&P space will influence some individual stocks, though macro, commodity and ETF flows will continue to be the broader near-term drivers.  Investors are shrugging off a sharp rise in inflation data released this morning, as analysts widely expected prices to rise year-on-year from last year’s pandemic-driven lows.

Oil prices rose on Thursday a day after slipping on data indicating weak U.S. driving season fuel demand as investors eyed upcoming U.S. economic data. "The market is recovering impressively from yesterday's dismal weekly EIA report, the drop in weekly gasoline demand was particularly disappointing," said Tamas Varga, analyst at PVM Oil Associates. "It will interesting to see whether the monthly OPEC report due out later will confirm last month's upbeat demand assessment for the second half the year. If it does, as expected, it should support oil prices." 

Natural gas futures are higher, trading around $3.15, ahead of weekly inventory data.  Analysts expect a build of 98 bcf.

US INTEGRATEDS 

No significant news.

INTERNATIONAL INTEGRATEDS    

No significant news.

CANADIAN INTEGRATEDS   

No significant news. 

U.S. E&PS    

RBC downgraded Callon PetroleumContinental Resources and SM Energy Company to Sector Perform from Outperform. 

Kosmos Energy announced that Mr. Roy A. Franklin has joined its Board of Directors, effective June 9, 2021.

Occidental announced it has entered into a definitive agreement to sell non-strategic acreage in the Permian Basin to an affiliate of Colgate Energy Partners III, LLC, for $508 million, subject to closing adjustments to reflect an April 1, 2021 effective date. The transaction, which is expected to close in the third quarter of 2021, includes approximately 25,000 net acres in the Southern Delaware Basin in Texas with current production of approximately 10,000 barrels of oil equivalent per day from about 360 active wells. Proceeds from the sale will be applied toward debt reduction.

RBC upgraded Marathon Oil and Range Resources to Outperform from Sector Perform. 

MKM Partners downgraded Matador Resources and Range Resources to Neutral from Buy. 

SM Energy Company announced that it priced an offering of $400 million in aggregate principal amount of its 6.500% senior unsecured notes due 2028. The aggregate principal amount of the offering was increased from the previously announced offering size of $350 million.

CANADIAN E&PS        

RBC upgraded Birchcliff Energy and Crescent Point Energy to Outperform from Sector Perform.

OILFIELD SERVICES    

AMECO was recently spun off by its parent company, Fluor Corporation. The company, which is headquartered in Greenville, S.C, with field operations throughout the United States and Canada, was purchased by middle market private equity firm One Equity Partners (OEP) for $73 million. 

Schlumberger New Energy and Panasonic Energy of North America, a division of Panasonic Corporation of North America, announced today that they have entered into a collaboration agreement for the validation and optimization of the innovative and sustainable lithium extraction and production process to be used by Schlumberger New Energy at its Neolith Energy pilot plant in Nevada. This collaboration paves the way for improved lithium production solutions that will help meet the expected surge in demand for lithium as the electric vehicle (EV) market takes off worldwide.

DRILLERS     

No significant news.

REFINERS     

No significant news.

MLPS & PIPELINES     

Enbridge announced that in collaboration with the Government of Ontario it is expanding natural gas access to rural, northern and Indigenous communities in Ontario, Canada.

Inter Pipeline reconfirmed that the Board of Directors unanimously recommends that Shareholders support the strategic share-exchange transaction with Pembina Pipelineand reject the revised hostile takeover offer proposed by an affiliate of Brookfield Infrastructure Partners L.P.

TC Energy confirmed that after a comprehensive review of its options, and in consultation with its partner, the Government of Alberta, it has terminated the Keystone XL Pipeline Project (the Project).

MARKET COMMENTARY

Futures contracts tied to the major U.S. stock indexes fluctuated on Thursday as investors digested a key inflation report that showed a bigger-than-expected increase in price pressures.  The consumer price index, which represents a basket including food, energy, groceries across a spectrum of goods, rose 5% from a year ago. Economists surveyed by Dow Jones had been expecting a gain of 4.7%.  European shares were little changed, while investors counted on the European Central Bank to maintain an accommodative policy stance at a meeting later in the day. Japan's Nikkei closed higher, as shipping firms rose on prospects of more economic reopenings and drugmakers were boosted by reports of government support. Gold prices fell, pressured by a firm dollar.

NASDAQ ENERGY TEAM THOUGHT LEADERSHIP 


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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