Oil Trading Down Following the Fall of Silicon Valley Bank
SECTOR COMMENTARY:
The energy sector is set for a lower start, pressure by weakness in the crude complex and in the major equity futures. U.S stock futures are sharply lower, dragged by pre-market losses in the Financial and Energy sectors, as the market digests a range of headlines. Investors are also bracing themselves for tomorrow’s Consumer Price Report which should provide more color on the Federal Reserve’s policy path.
Oil futures on both sides of the Atlantic are trading down ~5% in early trading, pressured by concerns over a fresh financial crisis following the fall of Silicon Valley Bank. Investors are also worried the Federal Reserve will continue to hike rates at a faster-than-expected pace amid a resilient economy and high crude oil inventories in the United States. Brent crude oil is trading near its January lows, while WTI touched prices not seen since early December. Rising optimism around Chinese demand recovery and weakness in the dollar are helping to cap losses.
Natural gas futures are slightly lower as forecasts suggest weather is expected to turn warmer in the near-term.
BY SECTOR:
US INTEGRATEDS
ExxonMobil's subsidiary Esso's Fos refinery in France was blocked by the renewed strike against the government's pension overhaul on Monday, a CGT union spokesperson said.
INTERNATIONAL INTEGRATEDS
The Board of Shell plc announced the pounds sterling and euro equivalent dividend payments in respect of the fourth quarter 2022 interim dividend, which was announced on February 2, 2023 at US$0.2875 per ordinary share.
The Saudi Arabian Oil Company announced its full-year 2022 financial results, reporting a record net income of $161.1 billion — its highest annual profits as a listed company. Aramco also declared a fourth quarter dividend of $19.5 billion, to be paid in the first quarter of 2023. Aramco’s net income increased by 46.5% to a record $161.1 billion in 2022, compared to $110.0 billion in 2021. The increase in net income reflects stronger crude oil prices, higher volumes sold and improved margins for refined products. Q4 2022 net income is in line with analyst estimates, excluding certain non-cash items of around $3.3 billion.
TotalEnergies said the rolling strike over the government's planned pension reform continued for the sixth day running at its French refineries and depots, a company spokesperson told Reuters.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
Gerdes Energy Research upgraded Magnolia Oil & Gas to Buy from Neutral.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
No significant news.
DRILLERS
No significant news.
REFINERS
No significant news.
MLPS & PIPELINES
Scorpio Tankers announced that it has exercised the purchase options on six ships.
MARKET COMMENTARY
U.S. stock index futures pared early gains as Silicon Valley Bank's collapse hit the banking sector on contagion fears, while bets that the Federal Reserve could pause interest rate hikes in March rose. Bank shares in Europe and Asia plunged. Oil prices fell. Gold prices jumped whereas the dollar was down.
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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