Oil Sees Five-Weeks of Consecutive Increases Amid Supply Concerns and Hopes China Will Stimulate Economy
SECTOR COMMENTARY:
The energy sector is trading higher in the pre-market, tracking gains in both crude oil and the major market futures. U.S equities are expected to begin the session higher ahead of various central bank interest rate announcements, heavy earnings and a slew of macroeconomic data to be released this week.
WTI and Brent crude oil are extending their gains, setting the stage for five-weeks of consecutive increases, on supply concerns and hopes China will stimulate their economy. Tightening conditions due to Saudi oil output cuts and summer demand being somewhat stronger for gasoline and jet fuel has paved the way for oil futures to trend higher, despite expectations of more rate hikes in the near future. Additionally, in China, the state planner on Monday unveiled measures to spur private investment in some infrastructure sectors, and said it will also strengthen financing support for private projects. Elsewhere, fighting also escalated last week in Ukraine after Russia withdrewfrom a U.N.-brokered safe sea corridor agreement for grain exports.
Natural gas futures edged higher on forecasts for hotter weather across the U.S mainland, with record setting temperatures expected in a number of states, especially over the Central Great Plains and the Middle Mississippi Valley.
BY SECTOR:
US INTEGRATEDS
Chevron provided second quarter 2023 performance highlights with reported earnings of $6.0 billion and adjusted earnings of $5.8 billion.
Chevron announced several senior leadership changes as well as a waiver of the mandatory retirement age for the chairman and chief executive officer, Mike Wirth. Pierre Breber, vice president and chief financial officer, will retire from Chevron in 2024 after 35 years of distinguished service to the company. Eimear Bonner, currently vice president and chief technology officer and president of the Chevron Technical Center, will succeed Breber as chief financial officer, effective March 1, 2024.
INTERNATIONAL INTEGRATEDS
TotalEnergies has signed an agreement with Rönesans Holding to acquire a 50% stake in Rönesans Enerji and jointly develop, through this joint-venture, renewable projects in Turkey, which is a liberalized growing electricity market.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
EQT is expected to show a fall in quarterly revenue when it reports results on July 25. The Pittsburgh Pennsylvania-based company is expected to report a 36.3% decrease in revenue to $1.027 billion from $1.61 billion a year ago, according to the mean estimate from 13 analysts, based on Refinitiv data.
Matador Resources is expected to show a fall in quarterly revenue when it reports results on July 25. The Dallas Texas-based company is expected to report a 31.4% decrease in revenue to $647.561 million from $943.93 million a year ago, according to the mean estimate from 9 analysts, based on Refinitiv data.
Range Resources is expected to show a fall in quarterly revenue when it reports results on July 24. The Fort Worth Texas-based company is expected to report a 58.6% decrease in revenue to $562.21 million from $1.36 billion a year ago, according to the mean estimate from 15 analysts, based on Refinitiv data.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
ChampionX is expected to show a rise in quarterly revenue when it reports results on July 24. The The Woodlands Texas-based company is expected to report a 5.1% increase in revenue to $980.39 million from $932.57 million a year ago, according to the mean estimate from 8 analysts, based on Refinitiv data. The company's guidance on April 24 2023, for the period ended June 30, was for revenue between $970.00 million and $1.00 billion.
Weatherford International is expected to show a rise in quarterly revenue when it reports results on July 25. The Houston Texas-based company is expected to report a 16.0% increase in revenue to $1.235 billion from $1.06 billion a year ago, according to the mean estimate from 5 analysts, based on Refinitiv data.
DRILLERS
No significant news.
REFINERS
No significant news.
MLPS & PIPELINES
Energy Transfer announced the quarterly cash distribution of $0.6293509 per Series C Preferred Unit, the quarterly cash distribution of $0.4765625 per Series D Preferred Unit, and the quarterly cash distribution of $0.4750000 per Series E Preferred Unit. These cash distributions will be paid on August 15, 2023 to Series C, Series D and Series E unitholders of record as of the close of business on August 1, 2023.
TC Energy announced that it has entered into an agreement to monetize a 40 per cent interest in its Columbia Gas Transmission, LLC (Columbia Gas) and Columbia Gulf Transmission, LLC (Columbia Gulf) systems. Columbia Gas and Columbia Gulf will be held in a new joint venture partnership with Global Infrastructure Partners (GIP). Total proceeds for the transaction are expected to be $5.2 billion (US$3.9 billion) in cash, to be paid at closing, subject to certain customary adjustments. The value of the 40 per cent equity interest implies an enterprise value to a comparable EBITDA1 multiple of approximately 10.5 times TC Energy’s base 2023 outlook and expected run-rate capital structure for the partnership entity.
MARKET COMMENTARY
Wall Street futures pointed to a positive open as investors look ahead to a slew of big tech earnings and the Fed’s rate decision later this week. European equities were lower, pulled down by declines in the financials and amid weak business activity data and an inconclusive election result in Spain. On the Asian front, Japan’s Nikkei ended higher as a weaker yen spurred automakers rally. Gold prices rose while the dollar also gained against the euro. Oil prices were up amid tightening supply trends and hopes for Chinese stimulus.
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 Rich Pontillo.
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