Oil Slips as Strength From the Debt Deal Proves Short-lived
SECTOR COMMENTARY:
The energy sector is poised for a mixed to lower start, pressured by weakness in the underlying commodities but supported by strength in the major equity futures which ticked higher on news of a tentative deal to raise the U.S. debt ceiling with Congress set to vote on the legislation as early as Wednesday.
WTI and Brent crude oil futures slipped lower following yesterday’s gains, falling as strength from the debt deal proved short-lived while mixed messages from major producers clouded the supply outlook ahead of their meeting this weekend. Following a warning to short sellers last week from Saudi energy minister Abdulaziz bin Salman that signaled OPEC+ may further cut output when they meet on June 4, Russian oil officials and sources, including Deputy Prime Minister Alexander Novak, said they are leaning toward leaving output unchanged. Investors will also be scrutinizing manufacturing and services data out of China later this week for cues on the fuel demand recovery amid the country’s bumpy economic recovery as well as U.S. nonfarm payroll data on Friday. The Inventory announcements will also be delayed this week following the extended-holiday weekend, with the API set to report after the close tomorrow followed by the EIA mid-day Thursday.
Natural gas futures extended their trend lower for the third-straight session, continuing to reel on reports showing record U.S. output, rising Canadian exports and forecasts for milder weather in key consuming that will stunt demand this week.
BY SECTOR:
US INTEGRATEDS
No significant news.
INTERNATIONAL INTEGRATEDS
From 22 May to 26 May, Equinor ASA has purchased a total of 2,546,465 own shares at the Oslo Stock Exchange at an average price of NOK 302.1009 per share.
Eni, RINA signed deal for energy transition, decarbonisation of maritime transport.
Petrobras has asked to resume a process for a license to drill a controversial well near the mouth of the Amazon river, the company's chief executive said late on Thursday.
TotalEnergies, operator of OML130 in Nigeria, announced the renewal of the production license on this block for 20 years.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
Crescent Point Energy advised that over the past week it has brought back on stream the full 45,000 boe/d of Kaybob Duvernay production previously shut-in due to the Alberta wildfires. No damage has occurred to the Company's assets.
Talos Energy announced that Zamajal, S. A. de C.V., a wholly owned subsidiary of Grupo Carso, has agreed to acquire a 49.9% interest in Talos's Mexican subsidiary, which holds the Company's 17.4% stake in Zama. Carso is one of the world's largest conglomerates and is headquartered in Mexico City, Mexico. Talos will remain the controlling shareholder of Talos Mexico. The transaction is expected to close within the third quarter of 2023, as is subject to approval by Mexico's Federal Economic Competition Commission.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
Shawcor announced that its pipe coating division, Pipeline Performance Group (“PPG”), has received a formal contract award for a development project, located offshore in South America. The Company had previously announced its conditional award, pending project sanction, in late 2022. Shawcor will provide thermal insulation and anticorrosion coating services from a Western Hemisphere facility. Project initiation is expected to begin in the fourth quarter of 2023. The coating value of this project is estimated to exceed C$110M.
TechnipFMC has been awarded a significant integrated Engineering, Procurement, Construction, and Installation (iEPCI) contract by Shell for its Dover development in the Gulf of Mexico.
DRILLERS
Lodbrok Capital LLP has been a long-term investor in Valaris since our inception in 2017, with funds and accounts managed or advised by Lodbrok holding more than 3% of the shares in Valaris. We served on the investor committee in the recent financial restructuring, during which we supported the business with new capital at a challenging time. Our history with Valaris makes us one of the longest-standing shareholders and our continuous involvement predates all members of the current board and senior executives.
REFINERS
No significant news.
MLPS & PIPELINES
RBC upgraded Equitrans Midstream to Outperform from Sector Perform.
Golar reported a Q1 2023 Adjusted EBITDA1 of $84 million and a Net Loss attributable to Golar of $102 million, inclusive of non-cash mark-to-market charges1 of $188 million and approved share buyback program of up to $150 million.
Tsakos Energy Navigation announced that it has called for redemption all 3,517,061 of its outstanding 8.75% Series D Cumulative Redeemable Perpetual Preferred Shares.
MARKET COMMENTARY
Optimism about the U.S. having reached a debt ceiling deal kept Wall Street futures positive, while European shares were steady. In Asian equity markets, Japan's Nikkei ended higher amid optimism for increased investment in the country's semiconductor industry, while China and Hong Kong stocks closed almost flat as investors remained cautious ahead of China's May manufacturing data. Gold prices rose as the dollar retreated. Oil fell as mixed messages from major producers clouded the supply outlook ahead of their meeting this weekend.
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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