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The energy sector is pointing to a higher start, supported by strength in the crude complex and in the major equity futures.
After four-consecutive days of declines, WTI and Brent crude oil futures turned this morning, regaining ground amid comments from Saudi Arabia that OPEC+ was sticking with output cuts and could take further steps to balance the market. Their statement was echoed by other OPEC+ members UAE and Kuwait who also denied any talks on changing the latest OPEC+ agreement ahead of their next meeting on December 4th. The meeting is set to take place a day before the start of European and G7 measures in retaliation for Russia’s invasion of Ukraine, which could support the market. Lingering global recession worries and concern about China’s rising COVID-19 case numbers kept a cap on gains.
Natural gas futures are down ~2% in early trading, pulling back from yesterday’s 7.5% rally on slightly moderating forecast in key consuming regions and ahead of tomorrow’s storage report.
BY SECTOR:
US INTEGRATEDS
No significant news.
INTERNATIONAL INTEGRATEDS
BP Plc abandoned a plan to restart operations at its biggest refinery in Europe this week after workers at the plant started strike action, Bloomberg reported. “The planned restart has been put on hold and operations at the refinery remain shut down,” the company said in emailed response to questions. It regrets the decision to proceed with industrial action and remains in talks with the unions, it said.
Citi upgraded BP to Buy from Neutral.
Eni and Inail sign a protocol on research, innovation and safety in the workplace. The five-year agreement will involve joint initiatives to test high-tech value solutions and to spread prevention culture across the energy supply chain, involving trade unions in the process
Equinor and its partners said they will invest 14.8 billion Norwegian crowns ($1.44 billion) to develop the Irpa gas discovery in the Norwegian Sea. The subsea project aims to produce about 20 billion cubic metres of natural gas for exports to Europe, sending it via the Aasta Hansteen platform some 80 kilometres (50 miles) east of Irpa, the partnership’s development plan showed.
Brazil’s National Energy Policy Council decided that diesel co-processed with vegetable oil by Petrobras can be used in the biodiesel mix, industry group Ubrabio said on Monday. Brazil’s biodiesel blending requirement, which determines how much biodiesel has to be mixed into diesel, is currently at 10%.
UBS downgraded Petroleo Brasileiro SA Petrobras to Sell from Buy.
RBC upgraded Repsol to Outperform from Sector Perform.
Aramco signed 59 corporate procurement agreements (CPAs) with 51 local and global manufacturers, with potential to create 5,000 new jobs in the Kingdom of Saudi Arabia over the next decade. The agreements, valued at $11 billion, are expected to reinforce Aramco’s robust supply chain and result in the development of materials manufacturing facilities in the Kingdom.
Industrial gases company Air Liquide and TotalEnergies plans to produce low-carbon hydrogen at the Grandpuits site in France, it said on Tuesday. Air Liquide will invest more than 130 million euros ($133.20 million) in the construction and operation of a new facility producing hydrogen, while TotalEnergies’ biorefinery will use the unit’s hydrogen to produce sustainable aviation fuel, the companies said in a joint statement.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
Continental Resources announced that it is initiating the final steps in closing its previously announced merger with Omega Acquisition, Inc. Following the completion of the merger, shares of Continental common stock are expected to cease trading on the New York Stock Exchange prior to market open on Wednesday, November 23, 2022, and will no longer be listed for trading on the NYSE.
Diamondback Energy files for mixed shelf; size not disclosed.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
SLB announced an award to its OneSubsea business and Subsea Integration Alliance of a large contract by bp for its Cypre gas project offshore Trinidad and Tobago. The contract scope covers the engineering, procurement, construction, and installation (EPCI) of the subsea production systems and subsea pipelines. The award represents Subsea Integration Alliance’s first fully integrated EPCI single contract with bp and the alliance’s first development in the Caribbean nation. The Subsea Integration Alliance team delivered the initial front-end engineering and design phase for the project and will now transition into the full EPCI phase. Offshore installation is scheduled to commence in 2024.
DRILLERS
Valaris announced that drillship VALARIS DS-12 has been awarded a four-well contract with BP offshore Egypt. The contract is expected to commence late in the third quarter or early in the fourth quarter 2023 and has an estimated duration of 320 days. The estimated total contract value, inclusive of a mobilization fee, is $136.4 million.
REFINERS
CVR Energy announced that its board of directors has authorized CVR Energy’s management to explore a potential spin-off of its interests in its nitrogen fertilizer business, which is owned by CVR Energy through the general and limited partner interests it holds in CVR Partners, LP, a publicly traded limited partnership. If effected, the potential spin-off would create a new public company to hold such interests and separate the nitrogen fertilizer business from CVR Energy’s refining and renewables businesses.
MLPS & PIPELINES
New Fortress Energy announced that it has finalized its agreements with Petróleos Mexicanos, Mexico’s state-owned oil company, to develop and operate an integrated upstream and natural gas liquefaction project off the coast of Veracruz in Southeastern Mexico.
TEN, Ltd reported results (unaudited) for the nine months and third quarter ended September 30, 2022. In the first nine months of 2022, TEN’s modern and diversified fleet generated gross revenues of $590 million, $183 million higher than the 2021 first nine-months, reflecting the strength of the tanker markets. Operating income climbed to $134 million, a six-fold increase. Net income for the first nine months of 2022 exceeded $103 million or $2.77 per share. TEN enjoyed a strong third quarter with gross revenues of $224 million, $92 million higher than the 2021 third quarter, and operating income of $67 million, with the same number of vessels between the two periods. Net income attributable to TEN during the 2022 third quarter reached $51.3 million, a 300% increase from last year, or $1.48 per share.
MARKET COMMENTARY
U.S. stock index futures were mixed as investors were concerned over curbs in China due to rising COVID cases. European shares rose, supported by a recovery in oil stocks after a rout in the previous session. Japanese shares ended higher as weakness in yen raised prospects of a better outlook for domestic manufacturers. Oil rose after Saudi Arabia said OPEC+ was sticking with output cuts and could take further steps to balance the market. Gold prices rose as the dollar pulled back its overnight gains.
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.
This communication and the content found by following any link herein are being provided to you by Corporate Solutions, a business of Nasdaq, Inc. and certain of its subsidiaries (collectively, “Nasdaq”), for informational purposes only. Nasdaq makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Sources include Reuters, TR IBES, WSJ, The Financial Times and proprietary Nasdaq research.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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