Business

Oil prices hit their lowest level in six months on fears of a global recession


The energy sector is poised for a lower open, following the decline in broader index futures (S&P 500 futures -0.8% at 8:40 a.m. ET) and a slight pullback in oil prices on entry after futures hit a 6-month low yesterday. Target reported a 90% decline in quarterly earnings as excess inventory piled up amid the pandemic and inflationary pressures weighed on results, while the 10-year Treasury yield hit a new 4-week high at more than 2.9%. Natural gas producers may be the only group to open in positive territory as Henry Hub futures rise another 2% to ~$9.60. The news flow in the sector is light.

Oil hit a six-month low on Wednesday after a brief rally as worries about the prospect of a global recession weakening demand overshadowed a report showing falling U.S. crude and gasoline inventories. Wednesday’s figures did little to improve the economic backdrop, showing UK consumer price inflation jumped to 10.1% in July, its highest since February 1982, intensifying pressure on households. “The oil market is struggling to shake off recession fears, and there’s no sign of that changing any time soon,” said Stephen Brennock of oil broker PVM. Earlier, prices were supported by a report showing lower crude and fuel inventories in the United States. Crude stocks fell by about 448,000 barrels and gasoline by about 4.5 million barrels, sources said Tuesday citing figures from the American Petroleum Institute.

Natural gas futures are trading at a decade-and-a-half high as near-term dry gas production forecasts fall, while record temperatures and the energy crisis in Europe support prices.

BY SECTOR:

INTEGRATED IN THE UNITED STATES

Indian oil explorer and producer Oil and Natural Gas Corp said it had signed a memorandum of understanding (HoA) with ExxonMobil for deep water exploration on the east and west coasts of the country.

INTERNATIONAL INTEGRATED

Petrobras said it has begun the process of seeking bids for a 40% stake in two oil exploration concessions located in the deep waters of the Potiguar Basin.

Petrobras informed that it has received from shareholders jointly holding more than 5% (five percent) of its ordinary shares, the request to adopt the cumulative voting system in the election of members of the Board of Directors (CA) during of the Extraordinary General Meeting (AGE) to be held on August 19, 2022, exclusively digital.

Santos Ltd said it would pursue development of a $2.6 billion oil project in Alaska, a surprise move for the market that sent its shares tumbling despite the Australian energy producer posting a record profit in the first half. The company also said it was in advanced talks with the shortlisted parties to sell a 5% stake in its prized asset, PNG LNG in Papua New Guinea, and raise approximately $1.5 billion, which it said analysts, will be used to finance the Pikka project in Alaska. . Santos chief executive Kevin Gallagher said Pikka, co-owner of Repsolwas “the right project at the right time in the right place”, predicting a strong internal rate of return of 19% based on an oil price of $60 a barrel.

Shell said it plans to shut down a key oil pipeline in the Gulf of Mexico that supplies refineries in Louisiana for two weeks in September. The Odyssey and Delta crude pipelines in September will be closed for scheduled maintenance from early to mid-September, Shell said in a statement.

Technip Energies, in consortium with Subsea 7 and Samkang M&T was selected by Corio Generation and TotalEnergies to perform a front-end engineering design (FEED) for their Ulsan Gray Whale 3 offshore wind farm project, located off the east coast of South Korea. The FEED contract covers the engineering of the float, mooring and inter-array cable (IAC) in collaboration with a wind turbine supplier.

CANADIAN INTEGRATED

No significant news.

E&PS United States

Laredo Petroleum announced the signing of a purchase and sale agreement to dispose of certain unoperated properties in Howard County for $110 million, subject to customary closing price adjustments. The transaction is expected to close in October 2022, with an effective date of August 1, 2022. Non-operated assets include approximately 1,650 net acres and have planned average net production for the year 2023 of approximately 1,800 BOEPD (~72% oil). The Company expects to adjust its production forecast after closing of the transaction. The sale does not reduce the eight-year inventory of high-quality drilling sites operated by the Company.

CANADIAN E&PS

No significant news.

OIL SERVICES

KBR announced that it has been awarded a $20 million contract from the United States Geological Survey (USGS) Albuquerque Seismological Laboratory (ASL) for the continued support of more than 330 operational or proposed stations in 69 countries, including approximately 230 stations in the continental United States

NOV announced that its board of directors has declared the regular quarterly cash dividend of $0.05 per common share, payable on September 30, 2022 to each shareholder of record on September 16, 2022.

DRILLERS

No significant news.

REFINERS

No significant news.

MLPS & PIPELINES

Ardmore Expedition announced that it is expanding its presence in Singapore this year. Due to its global business and operations, Ardmore is forming a more geographically balanced management team to meet the needs of its customers and partners. As part of the change, Mark Cameron, Chief Operating Officer (COO) of Ardmore, is leaving Ireland for Singapore where, in addition to his continued responsibilities as Chief Operating Officer, he will also take on the role of Chief Operating Officer. general of Ardmore Shipping Asia and one of its main areas of interest will be further business development opportunities in Singapore and the Far East. Mark will also work closely with Gerald Tan, Managing Director of Ardmore’s Singapore office to strengthen our local brand across a wide range of diverse interests.

EnLink Midstream, LLC announced the price of its increased offering of $700.0 million aggregate principal amount of 6.500% Senior Notes due September 2030 at a price of 100% of their face value. The Senior Notes will be fully and unconditionally guaranteed on a senior basis by EnLink Midstream Partners, LP, a subsidiary of EnLink. The sale of the Senior Notes is expected to close on August 31, 2022, subject to customary conditions. The offering size has been increased from the previously announced offering size of $500.0 million in aggregate principal amount of the Senior Notes.

Plains Midstream Canada, a subsidiary of Plains All American, announced that it is considering expanding its Fort Saskatchewan facility with strategic partners. The expansion would leverage existing infrastructure and add 50,000 barrels per day of C3+ fractionation capacity, while maintaining the flexibility to deliver propane/butane blend to the Plains Fractionation Facility in Sarnia, Ontario. .

SFL announced its preliminary financial results for the quarter ended June 30, 2022. Net income was $57.4 million, or $0.45 per share in the second quarter. The Board of Directors declared a quarterly cash dividend of $0.23 per share. The dividend will be paid on or about September 29 to shareholders of record on September 15, and the ex-dividend date on the New York Stock Exchange will be September 14, 2022.

SFL announced that it has agreed to acquire four modern Suezmax tankers in combination with long-term charters to a subsidiary of Koch Industries, a world-leading industrial conglomerate. The vessels are built in 2015 and 2020, respectively, and all four have modern eco-design features, including exhaust gas cleaning systems. The aggregate purchase price for the vessels is $222.5 million and the company expects to take delivery between August and October.

MARKET COMMENTARY

Stock index futures on Wall Street were in the red ahead of the release of minutes from the U.S. Federal Reserve’s July meeting that could give new clues about the pace of interest rate hikes. The dollar held onto its gains, while gold prices weakened. Recession fears dragged European stocks down, with the focus on inflation and GDP data due out later this week. The Japanese Nikkei finished above 29,000 for the first time in seven months, taking inspiration from Wall Street’s overnight rally. Oil prices fell on worries about the prospect of a global recession that would weaken demand.


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 Nasdaq, Inc. business and certain of its affiliates (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.

nasdaq

Back to top button