Oil Prices Rise Nearly 2% Amid Hopes That China’s Reopening Will Strengthen Demand
SECTOR COMMENTARY:
Energy stocks are set to open higher, tracking rebounding broader index futures, with the S&P 500 Index signaling a 0.5% gain at the open (as of 8:45 AM ET), along with continued earnings and corporate updates across the sector. Earnings continued across several upstream operators, oilfield services and refiners. Of note, Chevron announced yesterday after market close a $75 billion share repurchase authorization and a dividend increase of 6%. In macro news, 4Q US GDP rose 2.9%, slightly above 2.8% estimates, though worries remain of an oncoming recession in 2023, while initial jobless claims were +186K versus estimates of +205K. Futures have risen further following the economic data.
Oil prices rose nearly 2% on Thursday on expectations that demand will strengthen as top oil importer China reopens its economy and on news U.S. crude inventories have risen less than expected. "China's reopening is supporting demand prospects," said UBS analyst Giovanni Staunovo. "Also, market participants are closely tracking the upcoming OPEC+ JMMC meeting and the EU embargo on refined products." China has been easing stringent COVID-19 restrictions this month, with Beijing reopening its borders for the first time in three years.
Natural gas futures fell below $3, currently trading around $2.82, marking a fresh 2-year low, as mild winter weather and further delays at the Freeport LNG terminal weigh heavily on prices.
BY SECTOR:
Nippon Steel, Mitsubishi Corp and Exxon Mobil said they will jointly study carbon capture and storage (CCS) and the establishment of CCS value chains in the Asia Pacific regions.
The Board of Directors of Chevron declared a quarterly dividend of one dollar and fifty-one cents ($1.51) per share, an increase of nine cents ($0.09) per share or approximately 6 percent. The dividend is payable March 10, 2023, to all holders of common stock as shown on the transfer records of the Corporation at the close of business February 16, 2023. This increase puts Chevron on track to make 2023 the 36th consecutive year with an increase in annual dividend payout per share.
Two tankers chartered by Chevron are loading Venezuelan heavy crude at the South American country and should depart in coming days for the United States, according to shipping documents and sources.
INTERNATIONAL INTEGRATEDS
Eni said that the delivery of a liquefied natural gas (LNG) cargo to Pakistan LNG Limited that was scheduled for February has been disrupted due to an event of force majeure.
Brazil's Jean Paul Prates resigned as Senator, a document seen by Reuters showed on Thursday, a move that opens room for him to take over as chief executive of state-run oil giant Petrobras.
QatarEnergy will join TotalEnergies and Eni in exploring for oil and gas in Lebanon, the Lebanese energy ministry said on Thursday.
In line with its growth strategy in gas and LNG, a fuel contributing to the energy transition, TotalEnergies announced the start of gas production from onshore Block 10 in the Sultanate of Oman as well as an agreement with Oman LNG for a long-term LNG purchase contract.
Qatar is in talks to acquire a stake from French company TotalEnergies' $27 billion cluster of energy projects in Iraq, three sources told Reuters, as Baghdad hopes to stem efforts by Western energy companies to exit the country.
TotalEnergies said strike action had interrupted shipments at production sites in France, expect for the one at the Feyzin refinery.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
CNX reported Q4 EPS of $5.68 and sees 2023 FCF per share of about $2.20.
Marathon Oil Corporation announced that the Company's board of directors has declared a dividend of 10 cents per share on Marathon Oil Corporation common stock. The dividend is payable on Mar. 10, 2023, to stockholders of record on Feb. 15, 2023.
Murphy Oil announced its financial and operating results for the fourth quarter ended December 31, 2022, including net income attributable to Murphy of $199 million, or $1.26 net income per diluted share. Excluding discontinued operations and other items affecting comparability between periods, adjusted net income attributable to Murphy was $173 million, or $1.10 adjusted net income per diluted share. For the full year 2022, the company recorded net income attributable to Murphy of $965 million, or $6.13 net income per diluted share. Murphy reported adjusted net income, which excludes both the results of discontinued operations and other items affecting comparability between periods, of $881 million, or $5.59 adjusted net income per diluted share.
The Board of Directors of Murphy Oil declared a quarterly cash dividend on the Common Stock of Murphy Oil Corporation of $0.275 per share, or $1.10 per share on an annualized basis. This represents a 120 percent increase since fourth quarter 2021 and a 10 percent increase from the previous quarter. The dividend is payable on March 1, 2023, to stockholders of record as of February 13, 2023.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
Eagle Materials reported financial results for the third quarter of fiscal 2023 ended December 31, 2022. Notable items for the quarter are highlighted below (unless otherwise noted, all comparisons are with the prior year’s fiscal third quarter): Record Revenue of $511 million, up 10%; Adjusted EBITDA of $199 million, up 14%.
Liberty Energy announced fourth quarter and full year 2022 financial and operational results. Revenue of $4.1 billion, a 68% increase over the prior year, and net income1 of $400 million, or $2.11 fully diluted earnings per share, for the year ended December 31, 2022. Adjusted EBITDA of $860 million for the year ended December 31, 2022. Fourth quarter revenue of $1.2 billion, a 3% sequential increase, and net income of $153 million, or $0.82 fully diluted earnings per share, for the quarter ended December 31, 2022. Adjusted EBITDA of $295 million for the quarter ended December 31, 2022, a 7% sequential increase.
Baker Hughes announced that the Baker Hughes Board of Directors declared a cash dividend of $.19 per share of Class A common stock payable on Feb. 17, 2023 to holders of record on Feb. 6, 2023.
DRILLERS
No significant news.
REFINERS
Valero Energy reported net income attributable to Valero stockholders of $3.1 billion, or $8.15 per share, for the fourth quarter of 2022, compared to $1.0 billion, or $2.46 per share, for the fourth quarter of 2021. Excluding the adjustments shown in the accompanying earnings release tables, adjusted net income attributable to Valero stockholders was $3.2 billion, or $8.45 per share, for the fourth quarter of 2022, compared to $988 million, or $2.41 per share, for the fourth quarter of 2021.
Marathon Petroleum began a planned overhaul on a crude distillation unit (CDU) at its 593,000 barrel-per-day (bpd) Galveston Bay Refinery in Texas City, Texas, people familiar with plant operations said on Wednesday.
MLPS & PIPELINES
Energy Transfer LP announced a quarterly cash distribution of $0.305 per Energy Transfer common unit ($1.22 on an annualized basis) for the fourth quarter ended December 31, 2022, which will be paid on February 21, 2023 to unitholders of record as of the close of business on February 7, 2023.
Capital Link hosted a presentation by the senior management of InternationalSeaways on, January 17, 2023. During the 40-minute session, Lois Zabrocky, CEO, Jeffrey Pribor, CFO, and Thomas Trovato, Head of Investor Relations, highlighted the company’s strong performance during the last year, and outlined the booming tanker market as part of Capital Link’s Company Presentation Series.
MARKET COMMENTARY
The S&P 500 and the Nasdaq futures rose after Tesla's bullish outlook on sales calmed some concerns of a recession. European shares marched higher as quarterly results from STMicroelectronics and Nokia eased worries about the impact of inflation and slowing economic growth. Japan's Nikkei closed lower, with shipping firms leading the retreat. Gold prices eased as the dollar firmed.
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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