Crude rebounds after steep declines
[ad_1]
The energy sector is poised to start higher, supported by a rebound in the crude complex and major equity futures trying to rebound from near two-year closing lows with little new. Treasury yields also came off their highs, helping sentiment slightly with the benchmark 10-year yield down nearly 5 basis points to 3.823%.
After two consecutive sessions of steep declines, WTI and Brent crude rebounded this morning and are currently up around 1.8% in early trading. Futures on both sides of the Atlantic rebounded from a nine-month low on the back of supply restrictions in the US Gulf of Mexico before Hurricane Ian and a slight weakening in the US dollar. Growing expectations that OPEC+ could take action to stem the price decline by cutting supply at their next policy meeting on Oct. 5 also provided support. Iraq’s oil minister said on Monday that the group was monitoring prices and did not want a big jump or a slump. Several companies said they halted production at GoM’s offshore oil rigs ahead of the mighty Hurricane Ian. Later in the day, the first of the US inventory reports will also be in focus, and analysts expect it to show a 300,000 barrel increase in crude inventories.
First-month natural gas prices continued to build on yesterday’s modest gains ahead of tomorrow’s expiry, supported by expectations of a slight spike in demand due to unusually cool weather in the North and a surge in European prices. The European benchmark TTF rose 12% this morning on news of Nord Stream damage and Baltic Sea pipeline leaks. German officials believe NS 1 was attacked near a Danish island. Events are pushing some European countries (Denmark, Norway) to raise the level of safety of electricity and gas installations. The TTF closed yesterday at a 2-month low, down (46%) from its highs of last month.
BY SECTOR:
INTEGRATED IN THE UNITED STATES
No significant news.
INTERNATIONAL INTEGRATED
bp and Chevron said they halted production at offshore oil rigs in the Gulf of Mexico as a powerful Hurricane Ian slammed into the main offshore producing region of the United States.
Hertz and bp announced the signing of a memorandum of understanding for the development of a nationwide network of electric vehicle charging stations powered by bp pulse, bp’s global electrification and charging solutions brand. The MOU lays the foundation for Hertz and bp to drive the future of mobility and accelerate consumer adoption of EVs.
GW Integrated Solutions LLC, a consortium of Worley and Grand Isle Shipyard, has been awarded a contract to provide engineering, procurement, fabrication and construction services to bp-operated offshore assets in the Gulf of Mexico, United States.
tall grass and Equine announced a collaborative effort to pursue opportunities for the development of large-scale, low-carbon hydrogen and ammonia projects in North America. The partners will assess the production and market potential of hydrogen and ammonia, as well as the associated distribution infrastructure to facilitate large-scale decarbonization.
Global demand for aviation fuel is expected to fully recover to pre-pandemic levels of 300 million tonnes a year over the next two years, the aviation official told Shell said.
Cebu Pacific, in the Philippines, signed a memorandum of understanding with Shellwhich will supply the low-cost carrier with 25,000 tonnes of SAF per year for five years starting in 2026. The airline said this is part of its long-term plan to achieve net zero emissions by 2050.
INPEX announced that, through its subsidiary INPEX Masela, Ltd., and on behalf of its joint venture partner Shell Upstream Overseas Ltd., it extended a memorandum of understanding with PT PLN (Persero) regarding the long-term supply of liquefied natural gas and expanded the memorandum of understanding to incorporate joint studies on hydrogen/ammonia and CCS in relationship with the Abadi LNG project.
TotalEnergies said that further efforts would be needed on decarbonization, when presenting its “Energy Outlook 2022” document, and that new oil projects would still be needed until the mid-2030s.
Global oil demand will increase until the early 2030s and then decrease by 2.3% per year, TotalEnergies said in presentation slides, showing the company’s baseline scenario called “Momentum.”
TotalEnergies said it would spend 1 billion euros ($962.60 million) over the next two years to help businesses become more efficient in their use of energy at a time when Europe is facing a severe energy shortage in the midst of the war in Ukraine.
The strike prevented refined products from leaving three of the TotalEnergies’refineries and a fuel storage depot in France, a CGT union official told Reuters.
CANADIAN INTEGRATED
No significant news.
E&PS United States
CNX Resources announced the closing of its $500 million aggregate principal amount private placement of its 7.375% Senior Notes due 2031. The Notes were offered pursuant to an Indenture, dated September 26 2022, between CNX, the subsidiary guarantors thereto and UMB Bank, NA, as trustee. The Notes are guaranteed by all of CNX’s wholly-owned domestic restricted subsidiaries which guarantee its revolving credit facility.
Cosmos Energy reported on September 15, 2022 that the floating production, storage and offloading vessel of the Greater Tortue Ahmeyim Project had drifted approximately 200 meters from the quay following the impact of Typhoon Muifa. Kosmos was informed by BPthe operator of the GTA project, that the FPSO was brought back to the dock from the COSCO shipyard in China.
CANADIAN E&PS
No significant news.
OIL SERVICES
Silica holdings in the United States announced that its Industrial and Specialty Products segment will raise prices for most of its silica sands, aplite, limestone, diatomaceous earth, perlite, artificial clays and non-activated clay products used primarily in glass, filtration, foundry , paints and coatings, elastomers, roofing, chemicals, hobbies, building products and other applications. Price increases will range from 9% to 20% depending on product and grade and will be effective for shipments beginning November 1, 2022.
DRILLERS
Valaris announced that Matt Lyne has begun his role as Senior Vice President and Chief Commercial Officer, having been appointed to the role in late May.
REFINERS
Valero Energy reduced debt by approximately $1.25 billion in September through its previously announced takeover bids for various series of Valero senior notes, which Valero financed with cash on hand. This transaction, combined with debt reduction and refinancing transactions completed during the second half of 2021 and the first half of 2022, collectively reduced Valero’s debt by approximately $3.6 billion.
MLPS & PIPELINES
Stifel launched a cover on Enlink Midstream LLC with a buy rating.
Kinder Morgan announced that it has completed the sale of a 25.5% stake in its stake in Elba Liquefaction Company, LLC (ELC) to an undisclosed financial buyer for approximately $565 million, subject to customary price adjustments to reflect an economic effective date of July 1, 2022. This product will reduce short-term debt and create additional capacity for attractive investments, including opportunistic share buybacks. The value of the stake implies an enterprise value of approximately $2.3 billion for ELC, or approximately 13 times 2022E EBITDA. Upon closing, KMI and the undisclosed financial buyer will each hold a 25.5% stake and Blackstone Credit will continue to hold a 49% stake in ELC.
Scorpion Tankers announced that it had purchased its common stock on the open market. The Company purchased 222,396 of its common shares on the open market at an average price of $41.27 per share under the Company’s share buyback program.
MARKET COMMENTARY
U.S. stock index futures rebounded, after a sharp sell-off in recent sessions on rate hike-induced recession fears. Europe’s STOXX 600 index advanced, led by automakers and travel stocks. In Asian equity markets, the Japanese Nikkei closed, supported by heavyweight Fast Retailing, while Chinese stocks posted their best daily performance in six weeks as healthcare, consumer and tourism stocks climbed sharply. Gold rebounded from a 2.5-year low as a slight decline in the dollar and Treasury yields helped overcome pressure from the prospect of more aggressive rate hikes in the United States. Oil prices rose, supported by supply restrictions in the US Gulf of Mexico ahead of Hurricane Ian.
The Nasdaq Advisory Services Energy Team is part of the Nasdaq Advisory Services, the most experienced team in the industry. The team provides unparalleled shareholder analysis, a comprehensive view of trading and investor activity, and insights on how best to manage investor relations outreach efforts. If you have any questions, please contact Tamar Essner.
This communication and the content found by following any link herein are 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 representations or warranties with respect to such communication or content and expressly disclaims any implied warranties by 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.
[ad_2]
nasdaq