SECTOR COMMENTARY:
The energy sector is set for a higher start, supported by strength in the major market futures and the underlying commodities. U.S equities are expected to open higher after the release of March CPI data which showed inflation is cooling and as investors wait for Fed meeting minutes later today.
WTI and Brent crude oil were lower earlier but jumped as optimism the U.S Federal Reserve is getting closer to ending its hawkish policy increased after the release of U.S CPI data for March. The U.S Consumer Production Index showed a rise of 0.1% in March, lower-than analyst estimates of a 0.2% month over month rise. Inflation eased to 5%, closer to the Fed’s 2% goal, and to its lowest in nearly two years. Traders will be watching out for weekly EIA data as analyst expect a decline in crude inventories. Meanwhile, the API reported crude inventories rose by about 380K barrels last week which had pressured futures earlier.
Natural gas futures are mostly unchanged for the second-consecutive session, despite forecasts for above-normal temperatures in the next two weeks.
BY SECTOR:
US INTEGRATEDS
No significant news.
INTERNATIONAL INTEGRATEDS
Repsol and FREENOW have signed a strategic agreement to accelerate the transition of the taxi sector towards electric mobility. In this way, Repsol becomes the approved energy supplier of FREENOW in Spain for its drivers with a recharging service in service stations or public roads with the guarantee that the origin of the electricity is 100% renewable.
According to Reuters, Russia’s government has approved the sale of Shell’s former 27.5% stake in the Sakhalin-2 energy project to Russian energy firm Novatek NVTK.MM for 94.8 billion roubles ($1.16 billion), a government order showed on April 12.
CANADIAN INTEGRATEDS
RBC downgraded Imperial Oil to Sector Perform from Outperform.
U.S. E&PS
ConocoPhillips is hosting an Analyst & Investor Meeting to outline details of a compelling operating and financial plan that features durable returns and cash flow growth for decades to come, while further describing the company’s valued role in the energy transition. Greater than $115 billion of free cash flow available for distributions, representing greater than 90% of market cap, as of March 31, 2023. Durable cash flow growth with projected cash from operations and FCF compounded annual growth rate of approximately 6% and 11%. WTI FCF breakeven price of approximately $35 per barrel. Capital expenditures expected to average approximately $10 billion annually, resulting in 4 to 5% production CAGR at an average reinvestment rate of approximately 50%. Return on capital employed increasing over 1 percentage point annually. A strong balance sheet with gross debt reduction on track to meet previously announced $5 billion reduction target by 2026. Resource base of approximately 20 billion barrels of oil equivalent at less than $40 per barrel WTI, representing a resource life of more than 30 years at current production levels. An acceleration in the company’s greenhouse gas-intensity reduction target through 2030 from 40-50% to 50-60%, using a 2016 baseline.
According to SEC filing, for the first quarter of 2023, EOG anticipates a net gain of $376 million on the mark-to-market of its financial commodity derivative contracts. During the first quarter of 2023, the net cash paid for settlements of financial commodity derivative contracts was $123 million.
Northland Capital Markets downgraded Vitesse Energy Inc to Market Perform from Outperform.
CANADIAN E&PS
RBC downgraded MEG Energy to Sector Perform from Outperform.
OILFIELD SERVICES
Johnson Rice initiated coverage on Atlas Energy Solutions Inc with a Buy rating.
DRILLERS
No significant news.
REFINERS
No significant news.
MLPS & PIPELINES
Genesis Energy announced that, on April 11, 2023, the Board of Directors of its general partner declared a distribution on Genesis’ common units and Class A Convertible Preferred Units attributable to the quarter ended March 31, 2023. These distributions will be paid on May 15, 2023 to holders of record at the close of business on April 28, 2023.
MARKET COMMENTARY
U.S. stock index futures edged higher, while European shares were subdued as investors awaited key inflation data and minutes from the Federal Reserve’s policy meeting for clues on whether U.S. interest rates are near their peak. Japan’s Nikkei share average closed higher, helped by signs of consumer spending in department stores and spillover from optimism over billionaire Warren Buffett eyeing increasing investments in the country. Oil prices steadied. Gold firmed, boosted by a weaker dollar.
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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