Oil Trading Higher Amid Renewed Global Supply Concerns
SECTOR COMMENTARY:
The energy sector is poised for a broadly higher start, supported by strength in the underlying commodities and in the major equity futures. US index futures inched up after concerns over interest rates battered stocks in the prior session, while investors awaited data and comments from policymakers to assess the Federal Reserve's next steps.
Following three-consecutive sessions of declines, WTI and Brent crude oil futures are trading higher as renewed global supply concerns from Russia's fuel export ban counteracted demand fears driven by macroeconomic headwinds and high interest rates. Russia's Transneft suspended deliveries of diesel to the key Baltic and Black Sea terminals of Primorsk and Novorossiysk. Additionally, Russia temporarily banned exportsof gasoline and diesel to all countries outside a circle of four ex-Soviet states with immediate effect to stabilize the domestic fuel market, bringing new uncertainty to an already tight global refined product supply.
Natural gas futures are rebounding on the heels of two-straight days of losses as the NOAA's 6-10 day outlook shows below-normal temps over much of the US, west of the Continental Divide, while above-normal temps are seen from the Rockies eastward to near the Appalachians, into northern NY state and New England, as well as FL and GA.
BY SECTOR:
US INTEGRATEDS
An Australian union agreed to accept the proposals of the industrial arbitrator to resolve disputes at Chevron's two liquefied natural gas (LNG) projects, and will likely call off strikes, a person familiar with the matter said.
INTERNATIONAL INTEGRATEDS
PetroSolar Corporation, which is a subsidiary of Yuchengco-led PetroGreen Energy Corporation, cemented a power supply agreement with Shell Energy Philippines Inc. for a capacity delivery that shall be drawn from the former’s 20-megawatt Tarlac-2 solar farm that is sited at the Central Technopark in Tarlac City.
Bloomberg reported that TotalEnergies SE is looking to sell its remaining stake in UK North Sea gas fields within the Greater Laggan Area, according to people with knowledge of the matter. The move follows TotalEnergies’ sale of a 20% share in the Greater Laggan Area to Kistos Plc last year for $125 million and contingent payments of as much as $40 million. Viaro Energy Ltd. and Ineos AG each hold a 20% stake each in the fields.
JP Morgan upgraded Eni to Overweight.
JP Morgan upgraded Repsol to Neutral.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
No significant news.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
Chart Industries successfully syndicated the repricing of its $1,781 million senior secured term loan facility, which matures on March 17, 2030. Following the completion of the repricing, all outstanding amounts under the Term Loan will bear interest at a rate per annum equal to SOFR with a 0.50% floor, plus a 0.10% credit spread adjustment plus a margin equal to 3.25%. The repricing represents a reduction of 0.50% per annum compared to the SOFR margin applicable prior to the repricing. This is anticipated to result in cost savings of approximately $9 million in annual interest expense on the Term Loan.
Oceaneering International announced the pricing of its previously announced offering of $200,000,000 aggregate principal amount of additional 6.000% Senior Notes due 2028 in a private placement to eligible purchasers at a price of 91.500% of par, plus accrued interest from August 1, 2023. The 2028 Notes will constitute an additional issuance of Oceaneering’s outstanding 6.000% Senior Notes due 2028, which Oceaneering issued on February 6, 2018 in an aggregate principal amount of $300,000,000, and will form a single series with such notes. The 2028 Notes will mature on February 1, 2028. The offering is expected to close on October 2, 2023, subject to customary closing conditions.
Toromont Industries announced today that effective October 15, 2023, Michael McMillan will be appointed President and Chief Executive Officer and a member of the Board of Directors. This follows the previously announced retirement of Scott Medhurst as CEO, after a successful 35-year career with Toromont. While Mr. Medhurst retires as President and Chief Executive Officer, as well as a member of the Board of Directors, he will stay on as an Executive advisor to Mr. McMillan for a transition period.
DRILLERS
On September 21, 2023, Diamond Foreign Asset Company, a wholly owned subsidiary of Diamond Offshore Drilling, and Diamond Finance, LLC, a wholly owned subsidiary of the Company, issued $550 million aggregate principal amount of 8.500% Senior Secured Second Lien Notes due 2030 in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended. The Notes were issued at par for net proceeds of approximately $540 million, after deducting the initial purchasers’ discount and estimated offering expenses. The Company is using a portion of the net proceeds from the Offering to fully repay and terminate its term loan credit facility, redeem in full its Senior Secured First Lien PIK Toggle Notes due 2027 and repay all of the borrowings outstanding under its senior secured credit agreement, and it intends to use the remaining net proceeds for general corporate purposes.
REFINERS
No significant news.
MLPS & PIPELINES
On September 19, 2023, Gary Hultquist notified Kinder Morgan that he will retire from the Company’s Board of Directors effective October 31, 2023. Mr. Hultquist’s decision to retire is not due to any disagreement with KMI.
British Columbia has fined Coastal GasLink, the natural gas pipeline being built by TC Energy, C$346,000 ($256,810) for non-compliance with environmental regulations, the Canadian province said. British Columbia's Environmental Assessment Office fined Coastal GasLink C$340,000 for deficient erosion and sediment control measures, and a C$6,000 penalty for providing "false and misleading" information relating to maintenance inspection records.
MARKET COMMENTARY
Futures tracking Wall Street indexes inched up after concerns over interest rates battered stocks in the prior session, while traders kept a watch on comments from policymakers to assess the central bank's next steps. European shares slipped and were on track to close the week sharply lower as investors assessed the prospects that borrowing costs will remain high for some time. Japanese stocks trimmed early steep losses to end slightly lower after the Bank of Japan kept stimulus unchanged and signalled it was in no rush to tighten policy. Gold prices edged higher following weak flash PMI data out of Europe, although a stronger dollar kept bullion gains in check. Oil prices rose as renewed global supply concerns from Russia's fuel export ban counteracted demand fears driven by macroeconomic headwinds and high interest rates. Investors will monitor flash reading of the S&P Global manufacturing and services PMIs for September shortly after the opening bell.
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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Nasdaq Advisory Services Energy Team is part of Nasdaq's Advisory Services. 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.
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