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Markets

Oil Prices Rise On Venezuela Concerns

Thursday, June 07, 2018

Sector Commentary

Energy stocks are set to open higher, lifted by rebounding crude oil prices and modestly higher broader equity futures. WTI crude oil moved back above $65 this morning, while Brent crude oil regained $76, as futures rebound following yesterday's larger than expected build in crude oil and gasoline inventories. News flow within the sector is very light as recent industry conferences, bus tours and non-deal roadshows continue to take center stage.

Oil rose on Thursday on concerns about a plunge in exports from Venezuela, although surging U.S. production kept gains in check. Venezuela, which faces the threat of U.S. sanctions and is in the midst of an economic crisis, is nearly a month behind delivering crude to customers from its main oil export terminals, according to shipping data, and chronic delays and production declines could breach state-run PDVSA's supply contracts if backlogs are not cleared soon. "Troubles over supply from Venezuela come at a time when OPEC is considering easing supply cuts which have been in place since 2017 and were implemented to support the price," London Capital Group head of research Jasper Lawler said.

Natural gas futures are higher by 2% ahead of weekly inventory storage. Analysts expect a build of 90 Bcf.

INTERNATIONAL INTEGRATEDS

(Late Wednesday) Reuters - Royal Dutch Shell shut a sulfur recovery unit and the alkylation unit at its 227,586-barrel-per-day refinery in Convent, Louisiana, as part of an overhaul of the gasoline-producing fluidic catalytic cracking unit.

U.S. E&PS

Press Release - Anadarko Petroleum and Western Gas Equity Partners, LP announced the settlement of 9,200,000 outstanding tangible equity units, originally issued in 2015, in exchange for approximately 8,207,320 WGP common units and cash in lieu of fractional units.

Press Release - Northern Oil and Gas announced that it has closed on the Salt Creek Oil & Gas, LLC acquisition with a combination of cash and stock.

Press Release - Whiting Petroleum announced that it has commenced an offer to exchange all of its outstanding, unregistered 6.625% Senior Notes due 2026 for new, registered 6.625% Senior Notes due 2026.

OILFIELD SERVICES

Press Release - Baker Hughes announced that the Baker Hughes international rig count for May 2018 was 967, down 11 from the 978 counted in April 2018, and up 10 from the 957 counted in May 2017. The international offshore rig count for May 2018 was 198, up 4 from the 194 counted in April 2018, and down 4 from the 202 counted in May 2017.

(Late Wednesday) Press Release - Mitcham Industries announced financial results for its fiscal 2019 first quarter ended April 30, 2018. Total revenues for the first quarter of fiscal 2019 were $7.6 million compared to $18.4 million in the first quarter of fiscal 2018, largely driven by a decline in the sale of lease pool equipment and delays in orders for marine technology products.

DRILLERS

HSBC downgraded ENSCO to 'Hold' from 'Buy'.

REFINERS

(Late Wednesday) Press Release - Andeavor announced plans to build a refined products terminal at the Rosarito storage facility of Comisión Federal de Electricidad, in the state of Baja California.

MARKET COMMENTARY

Tracking global stocks, U.S. stock index futures were in the green amid expectations that the European Central Bank may soon start to wind-down its stimulus. The banking sector pushed the European markets higher and Japan's Nikkei rose, supported by metal stocks as copper prices soared. A weaker dollar helped to push gold prices up.

NASDAQ ENERGY TEAM IN THE NEWS

CNBC "Squawk Box"

Oil price decline 'temporary', says pro

May 31, 2018

Tamar Essner, Nasdaq Corporate Solutions energy director, provides her outlook on oil as prices decline amid production volatility.

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.