Crude Slides Amid Uncertainty Over Extension of OPEC+ Output Cuts
SECTOR COMMENTARY
Energy stocks are poised for a lower start, weighed down by weakness in the crude complex while U.S. stock index futures traded mixed as market participants look to close out a strong month of gains. Sector news is relatively quiet and all eyes are on the OPEC+ meeting taking place today and tomorrow.
Oil prices slid less than 1% on uncertainty about whether OPCE+ would agree to extend large output cuts this week, but vaccine hopes capped a lid to the downside. "Last week’s optimism is taking a hit this morning and longs are edging towards the exit ahead of the OPEC+ talks," said oil broker PVM's Tamas Varga, after OPEC+ failed to agree on policy in informal talks ahead of Monday and Tuesday's formal meetings. OPEC+ is set to decide whether to extend or taper current cuts into 2021 while this morning’s price action comes amid informal talks yesterday between members yielding no consensus.
Natural gas futures are moving higher this morning following gains last week. The updated NOAA 6-10 day weather forecast is roughly unchanged from Friday with cooler-than-average-to-seasonal temperatures expected in the south and mid-Atlantic regions. Warmer-than-average temperatures are expected in New England, the northern Midwest, and west coast.
U.S. INTEGRATEDS
ExxonMobil has called off the potential multibillion-dollar sale of its oil and gas assets in Australia's Bass Strait, Reuters reported.
INTERNATIONAL INTEGRATEDS
Aramco announced the expansion of its flagship program to increase local content and boost domestic supply chains. It is a significant milestone in the company's In-Kingdom Total Value Add (iktva) program, which marks its fifth anniversary on December 1st. The expansion includes plans for new international partnerships and the establishing of companies through an Industrial Investment Program (IIP), which is linked to the development of Aramco's business.
Eni announced agreement with Alphabio control for production of bio-based herbicides and biocides, Reuters reported.
Eni is a strategic partner for Egypt and cooperation between the two is slated to grow, Reuters reported.
HSBC downgraded BP to Hold from Buy.
Petrobras projected oil exports to jump to an average of 891,000 barrels per day (bpd) in the 2021 to 2025 period, up from 445,000 bpd in the 2015 to 2019 period, Reuters reported.
Shell reported work activities that may cause flaring at its Deer Park, Texas facility, Reuters reported.
U.S. E&PS
MKM Partners downgraded Centennial Resource Development and Magnolia Oil & Gas to Neutral from Buy.
CANADIAN E&PS
Canacol Energy is pleased to announce that the Corporation and Promigas S.A. E.S.P. have executed a series of new ship or pay agreements to transport gas from Canacol's fields located in the departments of Cordoba and Sucre to Cartagena and Barranquilla using existing gas transportation networks.
Obsidian Energy announced an update to its 2020 capital spending plan due to the re-initiation of Cardium development program. Obsidian Energy will increase its 2020 capital program by $3.2 million to commence drilling activity on the first pad within our Central Alberta Willesden Green asset.
OILFIELD SERVICES
CGG has been awarded a three-year contract extension by Petroleum Development Oman (PDO) to continue providing advanced land seismic imaging services at its dedicated processing center (DPC) in Muscat. The new contract will run from 1 January 2022 until 31 December 2024.
Diamond S Shipping announced that its previously agreed sale of a 2009-built MR vessel, the Atlantic Mirage, has been cancelled due to unexpected delays in the vessel’s itinerary, SEC filing reported.
KBR won a $300 million recompete for scientific, engineering and technical services for the U.S. Geological Survey's (USGS) Earth Resources Observation and Science (EROS) Center. The center combines remotely sensed data and science to better understand how the Earth's changing landscape impacts ecosystems, economics and everyday life.
TechnipFMC has successfully completed the remaining conditions required to enable work to commence on the Engineering, Procurement, and Construction (EPC) contract with Assiut National Oil Processing Company (ANOPC) for the construction of a new Hydrocracking Complex for the Assiut refinery in Egypt.
DRILLERS
Nabors Industries, Inc., a wholly-owned subsidiary of Nabors Industries Ltd.announced the final results of its offers to all Eligible Holders to exchange (x) certain aggregate principal amounts of the Company's (i) 4.625% Senior Notes due 2021, (ii) 5.50% Senior Notes due 2023, (iii) 5.10% Senior Notes due 2023, (iv) 5.75% Senior Notes due 2025, and (v) 0.75% Senior Exchangeable Notes due 2024 and (y) certain aggregate principal amounts of Parent's (i) 7.25% Senior Guaranteed Notes due 2026 and (ii) 7.50% Senior Guaranteed Notes due 2028 for up to $300 million aggregate principal amount of newly issued 9.00% senior priority guaranteed notes due 2025.
REFINERS
HollyFrontier outlined plans to nearly double its capital expenditure in 2021, boosting its renewables investment and counting on an expected recovery in fuel demand.
MLPS & PIPELINES
Wells Fargo upgraded DCP Midstream, Enbridge, Noble Midstream Partners andNuStar Energy, Targa Resources to Overweight from Equal Weight.
Wells Fargo upgraded EnLink Midstream LLC to Equal Weight from Underweight.
Wells Fargo downgraded Magellan Midstream Partners, Pembina Pipeline and TC Energy to Equal Weight from Overweight.
Wells Fargo upgraded Western Midstream Partners to Overweight from Underweight.
MARKET COMMENTARY
Futures for Wall Street’s major stock indexes fell, after Nasdaq witnessed a record closing high in the previous session, as investors looked to book profits. Asian equities dropped on selling pressure and month-end adjustments. European shares were muted, with focus set on Brexit negotiations. The dollar edged lower and gold extended its slide as prospects of vaccine-led economic recovery dented safe-haven bets. Oil prices tumbled on uncertainty about whether OPEC+ would agree to extend output cuts at talks this week.
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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