Energy stocks are set to open higher, tracking broader index futures that are in the green by roughly half a percent (as of 8:40 AM ET), while oil prices trade around breakeven levels. All eyes will be on the two-day Federal Reserve annual meeting at Jackson Hole for cues on Fed policy and the nature of how hawkish or dovish the governing body plans to be to fight inflation. Sector news is light other than a few analyst initiations.

Oil prices steadied on Thursday as producer group OPEC+ raised the prospects of curbing oil supplies while the prospect of an agreement that could return sanctioned Iranian oil exports to the market weighed. Comments on Monday by Saudi Energy Minister Prince Abdulaziz bin Salman about a disconnect between the futures and physical markets in which he flagged the possibility that OPEC+ could cut production have helped push oil prices to three-week highs. (Full Story) “The suggestion that the price did not align with fundamentals and that OPEC+ could cut output has clearly had the desired effect,” Oanda analyst Craig Erlam said. “It may also make the chance of a move back below $90 in the near-term hard to come by unless a nuclear deal is agreed upon and OPEC+’s appetite for cuts put to the test,” he added.

Natural gas futures are lower by a nickel ahead of weekly inventory data.  Analysts expect a build of 59 bcf versus the five-year average of +46 bcf.

BY SECTOR:

US INTEGRATEDS

A Venezuelan man has been indicted for allegedly laundering the proceeds of inflated procurement contracts obtained via millions of dollars in bribes to officials at Venezuelan oil venture Petropiar, the U.S. Department of Justice said. Petropiar is a joint venture between Venezuelan state oil company PDVSA and U.S. oil company Chevron.

BayoTech has received an order for four HyFill hydrogen transport trailers from Chevron. Chevron will use BayoTech’s transport trailers to distribute high-pressure gaseous hydrogen for power generation, transportation, and industrial applications in the western United States. Delivery is scheduled for Q1 2023.

INTERNATIONAL INTEGRATEDS

Exports of Mexico’s newest crude are ramping up under Italy’s Eni as U.S. refiners find it an apt replacement for banned Russian oil and one that complements domestic grades.

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Current gas prices in Europe are not sustainable and are at risk of a reversal, said Oeystein Bergsvik, Equinor’s vice president for commercial and portfolio in the company’s Norwegian unit.

The new operator of Russia’s Sakhalin-2 liquefied natural gas (LNG) project began to cut off supplies to foreign customers who did not agree to its demands to renegotiate purchase contracts, the Kommersant business daily reported. Shell, which owned a 27.5% stake in the original project, will not re-sign its contract to purchase 1 million tonnes of LNG per year and will play for time until the Russian side cancels the agreement.

Shell Energy Retail Limited is to refund and compensate 11,275 prepayment customer accounts it has overcharged on its default tariffs. The total amount of customer detriment to be refunded is £106,000. Refunds will be issued automatically to affected customers. In addition, the supplier will pay £400,000 to Ofgem’s voluntary consumer redress fund and £30,970 in goodwill payments to affected customers, equating to a total payment of £536,970.

The French transport minister said a report that TotalEnergies was involved in supplying jet fuel to the Russian military via a joint venture raised an “extremely serious” issue that demanded clarification.

CANADIAN INTEGRATEDS

No significant news.

U.S. E&PS

Diamondback Energy and Rattler Midstream LP announced the completion of the previously announced merger between Rattler and Diamondback. The merger resulted in Diamondback acquiring all of the limited partner interests in Rattler not already owned by Diamondback and its subsidiaries. Each public unitholder of Rattler received 0.113 of a share of common stock in Diamondback in exchange for each Rattler common unit owned.

Berenberg upgraded Kosmos Energy to Buy from Hold.

Occidental and its subsidiary 1PointFive announced they plan to begin detailed engineering and early site construction for their first large-scale Direct Air Capture (DAC) plant in Ector County, Texas, near Oxy’s portfolio of acreage and infrastructure that are conducive to safe and secure storage of carbon dioxide.

CANADIAN E&PS

No significant news.

OILFIELD SERVICES

Benchmark initiated coverage on ChampionX with a Buy rating.

Benchmark initiated coverage on NOV with a Hold rating.

Benchmark initiated coverage on TechnipFMC with a Buy rating.

DRILLERS

No significant news.

REFINERS

No significant news.

MLPS & PIPELINES

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Energy Transfer LP announced its subsidiary, Energy Transfer LNG Export, LLC, has entered into a 20-year LNG Sale and Purchase Agreement (SPA) with Shell NA LNG LLC related to its Lake Charles LNG project. Under the SPA, Energy Transfer LNG will supply Shell 2.1 million tonnes of LNG per annum (mtpa). The LNG will be supplied on a free-on-board (FOB) basis and the purchase price will be indexed to the Henry Hub benchmark, plus a fixed liquefaction charge. The first deliveries are expected to commence as early as 2026. The SPA will become fully effective upon the satisfaction of the conditions precedent, including Energy Transfer LNG taking a final investment decision (FID).

Frontline Ltd. reported net income of $47.1 million, or $0.23 per basic and diluted share for the second quarter of 2022. Adjusted net income was $42.5 million, or $0.21 per basic and diluted share for the second quarter of 2022. It reported total operating revenues of $300.4 million for the second quarter of 2022.

MARKET COMMENTARY

U.S. stock index futures rose, with investors’ focus set on the Federal Reserve’s Jackson Hole conference for clues on the pace of rate hikes. The dollar softened, while gold edged higher. European shares struggled for direction, ahead of minutes from the last policy meeting of ECB. Japan’s Nikkei ended higher, led by gains in drug makers and technology stocks.


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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