Oil Slides Lower Amid Growing Uncertainty Over the Global Macroeconomic Outlook and Mixed Supply Signals
SECTOR COMMENTARY:
The energy sector is poised for a lower start, pressured by further weakness in the crude complex and in the broader equity futures while treasury yields continued to strengthen and hit 16-year highs.
WTI and Brent crude oil futures have extended their slide lower for the fourth-consecutive session, reeling amid lingering strength in the greenback, growing uncertainty over the global macroeconomic outlook and mixed supply signals. Meanwhile, an announcement by Turkey's energy minister that the country will restart operations this week on a pipeline from Iraq that has been suspended for about six months further weighed on prices. Attention will shift to the next round of inventory reports and OPEC+ meeting tomorrow which analyst expected the group to keep its output unchanged.
Following two-consecutive days of steep declines, natural gas futures inched back in early trading, rising as traders weigh forecasts for lower demand due to milder weather over the next two weeks against a reduction in output, record exports to Mexico and a rise in the amount of gas flowing to U.S. LNG export plants even though some were reduced for maintenance. Data shows average gas output in the lower 48 U.S. states slid to 102.9 bcfd in September from a record 103.1 bcfd in August. On a daily basis, output fell by about 2.0 bcfd over the past four days to a preliminary three-month low of 101.2 bcfd on Monday. Meteorologists forecast the weather in the lower 48 states would turn from warmer than normal through Oct. 6 to mostly near normal from Oct. 7-17.
BY SECTOR:
US INTEGRATEDS
No significant news.
INTERNATIONAL INTEGRATEDS
TotalEnergies and Borealis celebrate the start-up of their Baystar joint venture’s new 625,000 metric ton-per-year Borstar polyethylene (PE) unit, which more than doubles the current production capacity at Baystar’s site in Bayport, Texas. The new USD 1.4 billion unit completes the partners’ integrated petrochemicals venture, which includes the expanded Bayport PE facility, and the ethane cracker at the TotalEnergies Platform in Port Arthur, Texas.
India has invited TotalEnergies to bid for oil exploration rights in the country, as the world's third-biggest oil importer and consumer seeks to reduce its dependence on costly imports. Oil Minister Hardeep Singh Puri on Monday said he had met TotalEnergies CEO Patrick Pouyanne in Abu Dhabi and invited him to bid for exploration rights to one million square kilometres of blocks across the country that have been opened up by Prime Minister Narendra Modi's government. India buys more than 84% of the oil it needs from overseas and is seeking to quickly develop its hydrocarbon reserves to reduce import dependence.
Global prices of liquefied natural gas (LNG) are expected to soften by the end of the decade as new supply comes online, the CEO of French energy firm TotalEnergies said in Qatar.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
Gran Tierra Energy announced the early participation results of its previously announced offers to Eligible Holders to exchange (i) any and all of the outstanding 6.250% Senior Notes due 2025 issued by Gran Tierra Energy International Holdings Ltd. (“GTEIH”) on February 15, 2018, and (ii) any and all of the outstanding 7.750% Senior Notes due 2027 issued by the Company on May 23, 2019 for newly issued 9.500% Senior Secured Amortizing Notes due 2029, pursuant to the terms and subject to the conditions set forth in the exchange offer memorandum and consent solicitation statement, dated September 19, 2023 in respect of the Exchange Offers and solicitations of. Any capitalized terms used in this press release without definition have the respective meanings assigned to such terms in the Exchange Offer Memorandum.
The U.S. Permian basin in Texas and New Mexico, the biggest U.S. shale oil basin, has enough additional oil to develop and will continue to grow in the next few years, Occidental Petroleum CEO Vicki Hollub said. "Well, we've seen continuing improvement in our oil well productivity and so we haven't seen a drop off," Hollub said, when asked about concern over productivity levels at an energy conference in the UAE's capital of Abu Dhabi. "Some operators are experiencing degradation ... but I think the Permian (Basin) still has enough additional oil to develop that will continue to grow over the next few years," she said.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
According to Reuters, ChampionX amended certain terms of existing credit agreement, including without limitation, to reprice about $620 mln of existing term loans
Expro announced acquisition of offshore services provider PRT Offshore.
SLB launched its carbon storage screening and ranking solution that increases confidence in site selection decisions based on scientific analysis of the long-term integrity and economic potential of an asset. The solution helps customers avoid suboptimal storage sites with risk factors that can waste valuable time and resources as well as decrease the probability of a carbon capture, utilization and storage (CCUS) project reaching final investment decision (FID).
DRILLERS
Seadrill initiated a share repurchase program September 12, 2023 to repurchase up to $250 million of the Company's common shares in open market transactions on the OSE and NYSE through March 31, 2024 pursuant to an agreement with Arctic Securities AS and its subsidiary, Arctic Securities. For the period from and including September 25 through 29, 2023, Seadrill purchased a total of 366,138 shares at an average price of $45.62 per share. The transactions effected through the agreement with Arctic comprise all the transactions effected by or on behalf of Seadrill Limited during the period.
REFINERS
No significant news.
MLPS & PIPELINES
KBC Securities downgraded Exmar to Reduce from Suspended.
MARKET COMMENTARY
Hawkish tone from Federal Reserve official pushed U.S. bond yields higher, weighing on U.S. futures and global stocks. Investors would keenly watch the Job Openings and Labor Turnover Survey (JOLTS) data scheduled for release later in the day. Gold extended losses as the dollar firmed, while oil fell on mixed supply signals.
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 Rich Pontillo.
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Nasdaq Advisory Services Energy Team is part of Nasdaq's Advisory Services. 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.
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