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Oil Slips After Increase in U.S. Crude and Gasoline Inventories

Oil prices were off around 1% in early Wednesday trade as a surprise build in both crude and gasoline inventories as reported by the API pulled prices lower.  This comes ahead of weekly DOE data expected to show a draw of 1.7 million barrels of crude oil.

SECTOR COMMENTARY

Energy stocks are set to open lower, tracking weaker broader index futures and lower oil and natural gas prices.  Equities are set to give back a portion of yesterday’s gains as the ongoing unresolved U.S.-China trade dispute lingers.  Sector news flow is light outside of a corporate update from Pioneer Natural on spending and workforce reductions, along with recommendation and price target revisions in several drillers from Simmons.

Oil prices were off around 1% in early Wednesday trade as a surprise build in both crude and gasoline inventories as reported by the API pulled prices lower.  This comes ahead of weekly DOE data expected to show a draw of 1.7 million barrels of crude oil.

Natural gas futures are lower also by approximately 1%.  Above average heat forecasts for the southeast are offsetting recent builds in inventories.

INTERNATIONAL INTEGRATEDS

(Late Tuesday) Reuters - BP plans to restart the small crude distillation unit (CDU) at its 413,500-barrel-per-day (bpd) refinery in Whiting, Indiana, by Thursday, said Midwest refined products market sources on Tuesday. The 75,000-bpd Pipestill 11A CDU was shut on March 15 for a planned overhaul. BP has reconnected other units at the refinery to Pipestill 11A in the past week, one of the final steps before restarting.

U.S. E&PS

(Late Tuesday) Reuters - Pioneer Natural Resources announced that it had cut about a quarter of its workforce to save costs and boost shareholder value. Pioneer laid off 230 employees this week at its headquarters and in its Permian Basin offices, and cut another 300 workers in April.

CANADIAN E&PS

TD Securities upgraded Advantage Oil & Gas to ‘Action List Buy’ from ‘Buy.’

OILFIELD SERVICES

Press Release - On May 21, 2019, the Board of Directors of CARBO Ceramicsappointed Gary A. Kolstad, age 60, to succeed William C. Morris as Chairman of the Board. Mr. Kolstad has served on the Board since 2006 and is currently the Company’s President and Chief Executive Officer.

Press Release - Hi-Crush Partners announced that it has appointed Mr. Michael Alan Oehlert as Chief Operating Officer, effective May 21, 2019. With the appointment of Mr. Oehlert as Chief Operating Officer, Robert E. Rasmus will cease serving as the principal operating officer of Hi-Crush, but will continue in his role as Chairman and Chief Executive Officer.

Press Release - KBR announced that it has been awarded a contract by Sonatrach and Cepsa to provide Basic Engineering Design (BED) and Front End Engineering Design (FEED) for the Rhoude el Krouf Field (RKF) redevelopment in Algeria.

(Late Tuesday) Press Release - TGS and Schlumberger announced a strategic collaboration for multiclient ocean-bottom node projects in the deepwater U.S. Gulf of Mexico. This collaboration includes the previously-announced 2,350 km2 Amendment Phase 1 project in the Mississippi Canyon and Atwater Valley protraction areas. Supported by industry prefunding, Amendment Phase 1 commenced in early 2019 and data acquisition is expected to complete in Q3 2019. Under the collaboration agreement, TGS and WesternGeco, the geophysical services product line of Schlumberger, will work together to develop opportunities to co-invest in additional multiclient ocean-bottom node projects in the U.S. Gulf of Mexico.

DRILLERS

Simmons & Co upgraded Diamond Offshore to ‘Neutral’ from ‘Underweight.’ 

REFINERS

(Late Tuesday) Press Release - CVR Energy announced that it has engaged BofA Merrill Lynch as its financial advisor to assist it in evaluating potential strategic alternatives, including a potential sale. The Company intends to evaluate alternatives in combination with its ongoing focus on accomplishing its strategic objectives, prudently managing costs and operating its businesses safely and reliably. CVR Energy also announced that its subsidiary has entered into a definitive agreement for the sale of its 1.5-million-barrel Cushing, Oklahoma, crude oil terminal and related assets to an affiliate of Plains All American Pipeline, L.P. for total consideration of approximately $36 million, and concurrently closed the transaction.

MLPS & PIPELINES

(Late Tuesday) Press Release - Pembina Pipeline announced that none of Pembina's Cumulative Redeemable Rate Reset Class A Preferred Shares, Series will be converted into Cumulative Redeemable Floating Rate Class A Preferred Shares, Series 6 of Pembina on June 3, 2019.

MARKET COMMENTARY 

U.S. stock futures edged lower amid renewed worries over the U.S.-China spat after reports Washington is considering Huawei-like sanctions on another Chinese tech firm. The Chinese stock markets were also on the backfoot. Meanwhile, most European shares pared losses. The dollar inched lower against a basket of key rival currencies. Gold was little changed.

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


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.

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