A generic image of a person on their laptop
Markets

Weakness In Crude Oil Prices Pressuring Energy Stocks

Tuesday, March 13, 2018

Sector Commentary

Energy stocks are mixed as strength in broader equities is countered by ongoing weakness in crude oil prices . Very thin sector and corporate news was reported this morning allowing traders to focus on the macro picture of positive inflation data along with questions regarding the replacement of Tillerson as Secretary of State.

WTI prices are extending yesterday's 1% weakness on ongoing concerns about a relentless rise in US shale output after yesterday's monthly report from the EIA which showed a projection of a rise in shale output of 131,000 bpd in April from the previous month to a record 6.95 million bpd. Oil had been up earlier this morning due to a port strike in Libya and maintenance in the North Sea. Meanwhile, OPEC's report tomorrow is expected to show output is down while inventory data from the US tomorrow is expected to show a continuation of recent supply builds.

Natural gas is extending yesterday's gains as technical buying helps the commodity to advance from resistance levels yesterday as demand is expected to rise due to lower temperatures the Northeast and Western US.

U.S. INTEGRATEDS

Press Release - Exxon Mobil plans to establish an ethylene cracker facility worth up to 200 billion baht near its existing refinery at Sri Racha, Chon Buri.

INTERNATIONAL INTEGRATEDS

Press Release - Eni has agreed to sell to Mubadala Petroleum, a wholly owned subsidiary of Mubadala Investment Company, a 10% stake in the Shorouk concession, offshore Egypt, where Zohr's super-giant gas field is located.

Press Release - The European Union called on Gazprom to fulfil its contractual obligations and resume shipments to Ukraine. The latest gas dispute between the two warring neighbours began after an arbitration court ordered Gazprom to pay Ukraine $2.56 billion as part of an earlier settlement.

(Late Monday) Press Release - Repsol inaugurated its first gas stations in Mexico, where the firm plans to open some 200 stations over the course of the year as part of a plan to capture as much as 10 percent of the market within five years.

Barclays upgraded Total to 'Overweight' from 'Equal Weight'.

U.S. E&PS

Jefferies upgraded Kosmos Energy to 'Buy' from 'Hold'.

Mizuho Securities terminated coverage of Oil and Gas Exploration and Production Industry.

(Late Monday) Press Release - W&T Offshore announced that it has entered into joint exploration and development agreements with a group of investors to drill up to 14 specified projects in the Gulf of Mexico over the next three plus years.

OIL SERVICES

Piper Jaffray assumed coverage of Core Laboratories at 'Neutral'.

(Late Monday) Press Release - Hi-Crush Partners announced that following the close of business on March 16, 2018, Hi-Crush will be added to both the Alerian MLP Index and the Alerian MLP Equal Weight Index, becoming one of the 50 constituents of each of those indices.

(Late Monday) Press Release - Effective March 12, 2018, Weatherford International appointed Angela A. Minas to serve as a member of the Board of Directors.

MLPs & PipelinES

(Late Monday) Press Release - Keyera announced a cash dividend for March 2018 of 14.00 cents per common share. The dividend will be payable on April 16, 2018, to shareholders of record on March 22, 2018.

MARKET COMMENTARY

U.S. stock index futures and European markets creeped higher as investors await U.S. consumer price data due later in the day to gauge the outlook for inflation and the Federal Reserve's rate hike stance. Asian markets closed mostly higher. The greenback rose against the yen after a suspected cover-up of a cronyism scandal put Japanese Premier Shinzo Abe and his close ally, Finance Minister Taro Aso, under fresh pressure. Gold dipped, pressured by a stronger dollar. Temporary suspension of a key Libyan port helped oil prices rise, pairing earlier losses due to rising U.S. crude output.

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.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.