Oil Prices Ease but Remain Above $75 Supported by Growing Fuel Demand
SECTOR COMMENTARY:
Energy stocks are set to open higher, with another strong session expected in the equity markets set to offset a pullback in commodity prices. Broader index futures are higher by another ~half a percent, carrying over strength from the prior two sessions as they rebound from Monday’s steep declines driven by concerns of a troubled Chinese real estate lender. Yesterday’s Federal Reserve statement seemed to strike a balance between the tapering bond buying while still maintain an accommodative rate policy, which is aiding risk assets. News flow across the sector is light.
Oil prices eased but remained well above $75 a barrel on Thursday, supported by growing fuel demand and a draw in U.S. crude inventories as production remained hampered in the Gulf of Mexico after two hurricanes. Both contracts firmed up on Wednesday after data from the EIA showed U.S. crude stocks in the week to September 17 fell by 3.5 million barrels to 414 million - the lowest total since October 2018. "With Gulf of Mexico production returning slowly, and natural gas prices remaining sky high, the structural outlook for oil remains promising as OPEC+ struggles to meet even its current production quotas," said Jeffrey Halley, analyst at brokerage OANDA.
U.S. natural gas futures held near a two-week low for a third day in a row on Thursday as the market waits for direction from a federal report expected to show last week's storage build was slightly bigger than usual. Traders noted prices were down about 12% from a seven-year high last week as domestic demand for the fuel fell with the coming of milder weather and output slowly recovers from the damage caused by Hurricane Ida in the Gulf of Mexico. Analysts forecast U.S. utilities added 75 bcf of gas into storage during the week ended September 17. That compares with an increase of 74 bcf in the same week last year and a five-year (2016-2020) average increase of 70 bcf.
BY SECTOR:
No significant news.
No significant news.
Cenovus Energy announced the early tender results of its previously announced cash tender offer and that it has increased the maximum aggregate purchase price for the Maximum Tender Offer from up to a maximum aggregate purchase price of $1,000,000,000 to up to a maximum aggregate purchase price of $1,250,000,000 of its outstanding 3.800% Notes due 2023, its outstanding 4.000% Notes due 2024, its outstanding 5.375% Notes due 2025, its outstanding 4.250% Senior Notes due 2027 and its outstanding 4.400% Notes due 2029. Cenovus also announced that it has eliminated the Series Tender Cap for the 2025 Notes. The terms and conditions of the Maximum Tender Offer are described in the Offer to Purchase.
CNX Midstream Partners, a wholly owned subsidiary of CNX Resources announced the settlement and final results of its previously announced cash tender offer to purchase any and all of its outstanding 6.500% senior notes due 2026. The Tender Offer expired at 5:00 p.m., New York City time, on September 21, 2021.
The Board of Directors of EOG Resources has declared a dividend of $0.4125 per share on EOG's Common Stock, payable October 29, 2021, to stockholders of record as of October 15, 2021. The indicated annual rate is $1.65.
PDC Energy announced publication of its 2021 Sustainability Report, highlighting the Company’s continued efforts and commitments to responsibly developing oil and natural gas. 2021 Sustainability Report highlights: Greenhouse gas and methane emission intensity reduction goals of 60% and 50%, respectively, by 2025. Introduced longer-term greenhouse gas and methane emission intensity reduction goals of 74% and 70%, respectively, by 2030. Eliminate routine flaring by 2025, accelerating the previous goal and exceeding the target set by the World Bank Zero Routine Flaring initiative by five years. Achieved three years without a Lost Time Incident in each the Wattenberg Field and Delaware Basin in 2021. Formalized Board oversight in September with approval of Environmental, Social, Governance and Nominating Committee.
SM Energy announced that its Board of Directors approved a semi-annual cash dividend of $0.01 per share of common stock outstanding. The dividend will be paid on November 5, 2021, to stockholders of record as of the close of business on October 25, 2021. The Company currently has approximately 121.5 million shares of common stock outstanding.
Tourmaline Oil announced a guidance update, the approved budget for 2022 and details on its free cash flow allocation strategy, including the declaration of a special cash dividend and an increase in its regular quarterly cash dividend. Given stronger than anticipated 2021 commodity prices and production volumes, and early achievement of the long-term net debt target, Tourmaline is in a position to increase its base quarterly dividend by $0.01/share to $0.18/share payable on December 31, 2021, which represents an annualized payout of $0.72/share as well as declare a special cash dividend of $0.75/share, payable on October 7, 2021, to shareholders of record on October 1, 2021 with an ex-dividend date of September 29, 2021. Given the observance of Canada's new statutory holiday on September 30th, this day will be considered a non-settlement day and as such the TSX requires the ex-dividend date on dividends with an October 1, 2021 record date to be September 29, 2021. This special cash dividend is designated as an "eligible dividend" for Canadian income tax purposes.
ChampionX announced the completion of an investment in PingThings, Inc., which has developed an advanced sensor AI platform that enables its customers to manage tremendous volumes of time series data at scale, helping achieve their system reliability, decarbonization and capital efficiency goals.
KBR announced it has been awarded a three-year contract to provide KBR INSITE monitoring and advisory services to OCI's integrated ammonia-methanol plant in Beaumont, Texas.
No significant news.
HollyFrontier continues to expect that the Sinclair Transactions will be completed in mid-2022. The completion of the Sinclair Transactions remains subject to the expiration or termination of the waiting period under the HSR Act and the satisfaction or waiver of the other closing conditions specified in the Business Combination Agreement and the Contribution Agreement.
Inter Pipeline announced the filing of its management information circular dated September 22, 2021 and related meeting and proxy materials in connection with the previously announced transaction with Brookfield Infrastructure Partners L.P., together with its institutional partners. The Circular and related materials are expected to be mailed to holders of common shares of Inter Pipeline in early October 2021.
Bernstein upgraded ONEOK to Outperform from Market Perform.
U.S. stock index futures were higher, as investors largely shrugged off concerns over the Federal Reserve's plans for future tapering. European shares were up and Asian equities ended in the green as worries about Evergrande eased. Norway's crown led currencies against the dollar after the Norges Bank became the first central bank in the developed world to raise interest rates in the post-COVID era, while spot gold prices gained.
NASDAQ ENERGY TEAM THOUGHT LEADERSHIP
- 5/19/21 –VIDEO: Energy Sector Catalysts
- 5/17/21 – VIDEO: Oil prices could become ‘a little disjointed’: Nasdaq Analyst
- 2/18/21 – VIDEO: Why the Texas energy crisis may send gasoline prices higher
- 2/17/21 – VIDEO: Texas Freeze Hits Oil Supply
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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