Crude Oil Futures Slide Lower Amid Rising Coronavirus Cases in Asia
The energy sector is poised for a lower start, pressured by weakness across the underlying commodities and in the major equity futures which fell this morning for the third straight session on fears that rising inflation could force the U.S. Federal Reserve to pare back its support soon and on reports showing a surge in COVID-19 infections in Asia.
WTI crude oil futures extended their slide lower and are off ~2% in early trading, in line with Brent, pressured by demand concerns as coronavirus cases in Asia rise, fears rising inflation might lead the U.S. Federal Reserve to raise interest rates and a mixed API report. Ahead of the official EIA report later this morning, last night’s API report showed U.S. crude oil stockpiles rose last week while gasoline and distillate inventories fell sharply.
Natural gas futures carried over yesterday’s declines into today’s session, pressured new forecasts of less hot weather over the next two weeks, a decline in exports and a small increase in output.
According to Reuters, Exxon Mobil shut a crude distillation unit (CDU) at its 502,500 barrel-per-day (bpd) Baton Rouge, Louisiana, refinery on Tuesday for planned work, said two sources familiar with plant operations. Exxon plans 30 days of work on the 90,000-bpd PSLA-8 CDU, the sources said.
Eni and bp announced that they have entered into a non- binding memorandum of understanding to progress detailed discussions on combining their upstream portfolios in Angola, including all their oil, gas and LNG interests in the country.
Cenovus Energy sold its gross overriding royalty in the Marten Hills area of Alberta to Topaz Energy Corp. for gross cash proceeds of $102 million. The sale successfully closed with a May 1, 2021 effective date. Cenovus will use the sale proceeds to reduce net debt, consistent with its commitment to use non-core asset sales to accelerate deleveraging to achieve the company’s interim net debt target of $10 billion.
No significant news.
Tourmaline Oil Corp. announced the completion of a further consolidation of NEBC Montney Assets. Tourmaline continues to expand its position in the greater North Montney play area, a strategy that began in late 2016 with the acquisition of the initial Gundy property which is the current anchor of the Company's North Montney complex. With completion of the Gundy Phase 2 expansion in early 2022, the property is expected to produce approximately 400 mmcfpd and 27,500 bpd of condensate and natural gas liquids. In April 2021, Tourmaline acquired 50% of the assets of Saguaro Resources Ltd. in the Laprise-Conroy North Montney play area of NEBC for cash consideration of $205 million and entered into a joint venture agreement to develop these assets. On April 1, 2021, Tourmaline also closed an infrastructure acquisition in the greater Laprise-Conroy area for cash consideration of $55 million. Tourmaline has completed three separate modest transactions over the past three quarters at Gundy and Doe, BC for total cash consideration of $54.5 million. Tourmaline has entered into a transaction with Topaz Energy Corp. in NEBC involving recently Tourmaline acquired BC Montney subsurface assets and a working interest in the Tourmaline facility complex at Gundy Creek for cash consideration of $245 million.
Oil States International announced that its Board of Directors elected Denise Castillo-Rhodes as a member of its Board of Directors. Ms. Castillo-Rhodes has been appointed as a Class II Director with an initial term expiring in May 2024 and will serve on the Company’s Audit Committee.
Additional full integrity products have been released from the PGS Flex Vision data rejuvenation program in the Gulf of Mexico. The application of new imaging technology to the prolific Flex Trend has revealed nearfield opportunities that boost potential far beyond original estimates.
No significant news.
Marathon Petroleum announced the redemption of all of the $300 million outstanding aggregate principal amount of its 5.125% senior notes due April 1, 2024, including the portion of such notes for which Andeavor LLC, a wholly-owned subsidiary of MPC, is the obligor. The redemption of the 2024 senior notes is part of MPC's previously announced plans to reduce long-term structural debt.
Delek Logistics Partners announced that it, along with Delek Logistics Finance Corp., a subsidiary of Delek Logistics, intends to offer $400 million in aggregate principal amount of senior notes due 2028 in a private placement to eligible purchasers, subject to market conditions.
Wall Street futures fell, along with world stocks, as markets feared that rising inflationary pressures might lead to early rise in U.S. interest rates. Focus will be locked on the Federal Reserve's minutes of its April meeting, due for release later during the day. The dollar rebounded, while gold edged lower. Cryptocurrencies retreated sharply after China banned its financial institutions and payment companies from providing services related to cryptocurrency transactions. Oil prices tumbled as surging coronavirus cases in Asia fueled demand concerns.
NASDAQ ENERGY TEAM THOUGHT LEADERSHIP
- 1/8/20 – CNBC’s Squawk Alley: Oil market reaction to US-Iran tensions
- 1/8/20 – Bloomberg Day Break – Steady escalation of US-Iran tensions
- 12/5/19 – Bloomberg Balance of Power – OPEC's Limited Efficacy
- 9/17/19 – Oil's New Risk Premium Discussion on CNBC TV
- 9/16/19 – Discussion on Bloomberg TV about Impact of Abqaiq Attack
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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