Crude Steadies as Demand Fears Outweigh U.S. Inventories Drawdown
SECTOR COMMENTARY
Energy stocks are set to open lower, as S&P 500 futures that are down nearly 1% and weaker crude oil prices continue to weigh on sentiment. In industry news, Scotiabank made a handful of stock recommendation changes in the integrated and E&P space.
Oil prices steadied on Thursday, as a fall in U.S. inventories last week was tempered by a stronger dollar and a renewed wave of COVID-19 cases in Europe that led several countries to reimpose travel restrictions. On Wednesday, prices climbed slightly after government data showed U.S. oil inventories fell last week. Crude stocks fell by 1.6 million barrels, gasoline by 4 million barrels, and distillate stockpiles posted a surprise drawdown of 3.4 million barrels. "The current economic and oil backdrop is anything but encouraging and this capped the attempted rally," Tamas Varga of oil brokerage PVM said.
Natural gas futures continue to rebound, up another 4% this morning, to $2.22, ahead of weekly inventory data. Analysts expect a build of 77 bcf.
U.S. INTEGRATEDS
Scotiabank downgraded Chevron to ‘Sector Perform’ from ‘Sector ‘Outperform’.
MKM Partners initiated coverage on Chevron with a ‘Buy’ rating.
Scotiabank upgraded ExxonMobil to ‘Sector Perform’ from ‘Sector Underperform’.
INTERNATIONAL INTEGRATEDS
Scotiabank started coverage on BP, Royal Dutch Shell PLC (RDSa) and Total with a ‘Sector Perform’ rating.
Scotiabank started coverage on Royal Dutch Shell PLC (RDSb) with a ‘Sector Outperform’ rating.
Reuters - Total said it was investing more than 500 million euros ($583 million) to convert its Grandpuits, France, refinery into a zero-crude platform for biofuels and bioplastics.
U.S. E&PS
Tudor Pickering upgraded Cabot Oil & Gas to ‘Buy’ from ‘Hold’.
(Late Wednesday) Press Release - EOG Resources announced the appointment of Michael T. Kerr to its Board of Directors, effective October 5, 2020. The Board of Directors declared a dividend of $0.375 per share on EOG's Common Stock, payable October 30, 2020, to stockholders of record as of October 16, 2020. The indicated annual rate is $1.50.
(Late Wednesday) Press Release - SM Energy Company announced that its Board of Directors has approved a semi-annual cash dividend of $0.01 per share of common stock outstanding. The dividend will be paid on November 4, 2020, to stockholders of record as of the close of business on October 23, 2020. The Company currently has approximately 114.6 million shares of common stock outstanding.
Scotiabank downgraded Hess to ‘Sector Perform’ from ‘Sector Outperform’.
Scotiabank downgraded Murphy Oil to ‘Sector Underperform’ from ‘Sector Perform’.
Scotiabank upgraded Occidental Petroleum to ‘Sector Outperform’ from ‘Sector Perform’.
CANADIAN E&PS
JPMorgan initiated coverage on Canacol Energy with an ‘Overweight’ rating.
OILFIELD SERVICES
Press Release - Sterling Auxiliaries Pvt. Ltd. and its parent company, Artek Surfin Chemicals Ltd., a leading producer of specialty chemicals with manufacturing capabilities across four continents, have agreed to acquire the land and assets associated with Baker Hughes' Sand Springs, Oklahoma, chemicals manufacturing facility.
Press Release - CGG announced completion of the first phase of its multi-year program to deliver the largest OBN multi-client survey ever acquired in the UK Central North Sea (CNS) and immediate commencement of the second acquisition phase. The survey started in March 2020 and has already received significant industry interest and prefunding, with first images targeted for Q1 2021.
(Late Wednesday) Press Release - Fluor announced that the company named Teri P. McClure as a director effective October 1, 2020. McClure will serve on the board’s audit and governance committees and will bring the total number of Fluor board members to 13.
MARKET COMMENTARY
Index futures turned lower recently amid growing concerns about another economic hit from the coronavirus pandemic. The dollar was up, boosted its safe-haven appeal. Gold dropped as analysts said the lack of additional stimulus measures reduced the metal's appeal. With central bankers also in focus, the U.S. Federal Reserve Chairman Jerome Powell will be closely watched when he and a number of colleagues speak later in the day.
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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