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SECTOR COMMENTARY:
The energy sector is poised for a mixed to higher start, supported by mild strength in the crude complex while the major equity futures trade near the flatline. Futures tied to the S&P 500 and the Dow pared losses as resilient earnings from big U.S. banks helped assuage fears of further stress in the sector after the failure of two mid-sized lenders last month sparked concerns about a potential recession.
WTI and Brent crude oil futures edged higher after the West’s energy watchdog said it expected global demand to rise to a record high this year on the back of a recovery in Chinese consumption. The International Energy Agency also warned that output cuts announced by OPEC+ producers could exacerbate an oil supply deficit and hurt consumers.
Natural gas futures are down in early trading as the NOAA’s 6-10 day outlook shows below-normal temps for much of the western US, extending across the Northern Plains into parts of the western Great Lakes.
BY SECTOR:
US INTEGRATEDS
Chevron Canada Limited (Chevron) is voluntarily relinquishing 19 offshore oil and gas permits on Canada’s west coast within the Scott Islands marine National Wildlife Area and the Hecate Strait and Queen Charlotte Sound Glass Sponge Reefs Marine Protected Area (MPA).
INTERNATIONAL INTEGRATEDS
British union Unite said on Friday that some 70 workers employed by TotalEnergiesbased on the Elgin Franklin and North Alwyn platforms along with the Shetland Gas Plant were being balloted for strike action.
CANADIAN INTEGRATEDS
Scotiabank downgraded Cenovus Energy to Sector Perform from Outperform.
U.S. E&PS
No significant news.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
USA Compression Partners announced a cash distribution of $0.525 per common unit ($2.10 on an annualized basis) for the first-quarter of 2023. The distribution will be paid on May 5, 2023 to unitholders of record as of the close of business on April 24, 2023.
DRILLERS
No significant news.
REFINERS
Vertex Energy provided an update to its financial and operational outlook for the first quarter of 2023. Throughput volumes at the Company’s Mobile, Alabama Refinery (the “Mobile Refinery”) for the first quarter of 2023 are between 69,000 and 72,000 barrels per day (bpd), aligning with management’s prior expectations. The sequentially lower throughput volumes compared to Q4 2022 reflect the previously communicated facility downtime associated with the final stages of reaching mechanical completion of the renewable diesel (RD) conversion project at the Mobile Refinery. Total capital expenditures for the first quarter of 2023 are now expected to be approximately $65-70 million, exceeding the prior forecasted capex range of $30-$35 million. This updated guidance reflects management’s decision to bring forward $35 million of planned capital spending for the renewable diesel project from Q2 to Q1. The total project budget range for phase I of the RD conversion project remains in line with the previous target range of $110-$115 million.
MLPS & PIPELINES
DHT Holdings provided the following business update: For the first quarter of 2023, the Company estimates time charter equivalent earnings for its fleet at $49,100 per day, comprising of $35,000 per day for the Company’s VLCCs on time-charter and $54,600 per day for the Company’s VLCCs operating in the spot market. Thus far in the second quarter of 2023, 35% of the available VLCC spot days have been booked at an average rate of $75,500 per day on a discharge-to-discharge basis. 55% of the available VLCC days, spot and time-charter days combined, have been booked at an average rate of $52,200 per day.
Targa Resources announced that its board of directors has declared an increase to its quarterly cash dividend to $0.50 per common share, or $2.00 per common share on an annualized basis, for the first quarter of 2023, consistent with previously disclosed expectations. This dividend represents a 43 percent increase over the common dividend declared with respect to the first quarter of 2022. This cash dividend will be paid May 15, 2023 on all outstanding common shares to holders of record as of the close of business on April 28, 2023.
MARKET COMMENTARY
Futures tied to the S&P 500 and Dow pared losses as resilient earnings from big U.S. banks helped assuage fears of further stress in the sector after the failure of two mid-sized lenders last month sparked concerns about a potential recession. European shares rose as U.S. inflation data signaled an end to the rate-hike cycle. Japan’s Nikkei closed higher tracking Wall Street gains from overnight. Oil prices rose after the International Energy Agency said it expected global demand to rise this year on the back of a recovery in Chinese consumption. Gold prices steadied, helped by a weaker dollar. Industrial production data and retail sales data are due later in the day.
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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