The energy sector is poised for a lower start, pressured by weakness in the crude complex and the major market futures. U.S. stocks are expected to open lower as investors believe the Federal Reserve may continue to be hawkish despite data which showed inflation is beginning to ease.
WTI and Brent crude oil are down in early trading as COVID-19 infections increase in China and on a stronger dollar. China reported 14,878 new COVID-19 infections for 12-November, including a record number of new daily cases in capital city Beijing as well as in manufacturing hubs Guangzhou and Zhengzhou. The Dollar Index is up +0.50% to 106.70, off intra-morning highs of 107.14. Additionally, recovering exports at the Caspian Pipeline Consortium is adding further pressure to futures.
Natural gas futures jumped this morning on forecasts for colder weather and more heating demand than previously expected.
BY SECTOR:
US INTEGRATEDS
California gasoline retreated in the Los Angeles wholesale market on Friday as fears of production disruptions at Chevron’s Los Angeles-area refinery in El Segundo, California, went unrealized, said West Coast market traders.
ExxonMobil announced the first cargo of liquefied natural gas (LNG) from the $8 billion Coral South floating LNG (FLNG) project offshore Mozambique, bringing additional LNG volumes to the global energy market.
ExxonMobil and Indonesian state-owned energy company Pertamina have signed a $2.5 billion agreement to further assess development of a regional carbon capture and sequestration hub in Indonesia, the White House said in a statement.
Wells Fargo upgraded Occidental Petroleum to Equal Weight from Underweight.
INTERNATIONAL INTEGRATEDS
Aramco and Indonesia’s PT Pertamina (Persero) are exploring collaboration across the hydrogen and ammonia value chain. The companies signed a Memorandum of Understanding (MoU) outlining future cooperation across this key pathway of the energy transition, in a ceremony that took place alongside the B20 Summit in Bali, the official G20 dialogue forum with the global business community.
Workers at BP’s refinery in Rotterdam began a “work-to-rule” action after an ultimatum expired at noon with no new pay agreement in place, a union spokeman said.
Financial Times reported that BP has reorganised the management of its offshore wind business after a series of new hires from industry rivals Orsted, Iberdrola and RWE since the start of the year. The appointments, amid an increasingly competitive war for talent in the renewable energy sector, represent a coup for the UK-listed company, which has some of the oil and gas industry’s most ambitious targets for the rollout of green power.
Eni, as Delegated Operator of the Coral South project on behalf of its Area 4 Partners (ExxonMobil, CNPC, GALP, KOGAS and ENH), informed that the first shipment of liquefied natural gas (LNG) produced from the Coral gas field, in the ultra-deep waters of the Rovuma Basin, has just departed from Coral Sul Floating Liquefied Natural Gas (FLNG) facility.
The Hywind Tampen floating offshore wind farm off the west coast of Norway, which will supply power to oil and gas fields and cut their emissions, started producing its first power on Sunday, Equinor said. The power was delivered to the Gullfaks A platform in the North Sea, the company said.
Gas production at Equinor’s Aasgard B gas processing platform was shut on Sunday and could remain offline until Nov. 15 following a fire in a transformer, the company said.
Following the delivery of testing samples this summer, Global Bioenergies and Shellagree to collaborate on the development and testing of low carbon road fuels.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
APA announced the achievement of a compensation-linked environmental, social and governance (ESG) goal to reduce upstream routine flaring across Egypt operations by 40%. The goal was reached ahead of schedule and is the result of numerous emissions reduction projects executed in Egypt throughout 2022.
CANADIAN E&PS
Raymond James downgraded MEG Energy to Market Perform from Outperform.
OILFIELD SERVICES
Wells Fargo downgraded Chart Industries Inc to Equal Weight from Overweight.
Minerals Technologies announced that Erik Aldag, Director, Investor Relations, Financial Planning & Analysis, has been promoted to Senior Vice President, Finance and Treasury, and Chief Financial Officer succeeding Matthew Garth, who is leaving MTI to pursue another opportunity. Mr. Aldag joined MTI in 2017 as Director, Financial Planning & Analysis and assumed the additional responsibility for Investor Relations in 2020. In his new role, Mr. Aldag will serve as an officer of the company and a member of the executive management committee.
Shawcor reported its financial results for the three months ended September 30, 2022. On a consolidated basis, revenue was $335 million, income from operations was $23 million and Adjusted EBITDA was $40 million, which includes expenses of over $9 million of share-based incentive compensation costs partially offset by approximately $7 million of foreign currency gains.
DRILLERS
No significant news.
REFINERS
HF Sinclair Corp enters into a share repurchase agreement with REH Company to repurchase 1.7M shares at $60.60 per share, pursuant to the company’s previously disclosed $1B buyback program. Including this announced purchase, the company has bought back $257M worth of stock.
MLPS & PIPELINES
Cheniere Energy Partners, L.P. announced that its subsidiary, Sabine Pass Liquefaction, LLC, intends to offer, subject to market and other conditions, $430 million principal amount of Senior Secured Amortizing Notes due 2037. SPL intends to use the gross proceeds from the offering, together with cash on hand, to redeem $500 million in aggregate principal amount of SPL’s outstanding senior secured notes due 2023.
On November 11, 2022, Dylan A. Bramhall was appointed as Group Chief Financial Officer of LE GP, LLC, the general partner of Energy Transfer LP, with such appointment effective immediately. Mr. Bradford D. Whitehurst, the current Chief Financial Officer, will continue in a senior executive role focusing on tax strategy and corporate initiatives. Mr. Whitehurst will continue to report directly to the office of the Chief Executive Officer.
SFL Corporation announced its preliminary financial results for the quarter ended September 30, 2022. Net profit was $49.9 million, or $0.39 per share in the third quarter. Adjusted EBITDA was $117.7 million from consolidated subsidiaries, plus an additional $7.9 million adjusted EBITDA from associated companies. The Board of Directors has declared a quarterly cash dividend of $0.23 per share. The dividend will be paid on or around December 30, 2022, to shareholders of record as of December 14, 2022, and the ex-dividend date on the New York Stock Exchange will be December 13, 2022.
MARKET COMMENTARY
Wall Street futures declined amid fading expectations of a less aggressive Federal Reserve interest rate hike after Governor Christopher Waller said the central bank was not softening its fight against inflation. Falling risk appetite strengthened the dollar, while gold prices slipped. European shares made modest gains, as media stocks were boosted by Britain’s Informa. Japan’s Nikkei closed lower as investors booked profits and market heavyweight SoftBank tumbled after its Vision Fund investment arm reported another big quarterly loss. Oil prices fell due to surging coronavirus cases in China and firmer dollar.
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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