• January 31, 2023

Oil Prices Recover on Fears of Prolonged Suez Canal Ship Blockage

SECTOR COMMENTS:

Energy stocks are off to a higher start, supported by gains in the crude oil complex, while broader equity markets are mixed to trade higher and aim to end the volatile week in positive territory. Interest rates rose, weighing on the tech-heavy Nasdaq Composite while the Dow rose, indicating that reflation trading will be in full effect today.

Oil prices are higher this morning and are rebounding on concerns that it could take weeks for the container ship to block the Suez Canal, limiting supplies of crude oil and refined products. Both benchmarks were on their way to their third weekly loss. Oil markets were also revitalized by concerns about escalating geopolitical risk in the Middle East. Yemen’s Houthi forces said they launched attacks on Saudi Aramco facilities. Finally, a much stronger US dollar is also contributing to the downtrend.

Natural gas futures are down half a percent to $ 2.569. The April contract expires on Monday. The forecasts for the last 6 to 14 days were negative for demand as temperatures are colder in the south (muted cooling demand) and warmer in the north (muted heating demand).

US INTEGRATED

No major news.

INTERNATIONAL INTEGRATED

In accordance with the requirements of Listing Rule 9.6.11 (2), BP plc announced that Professor Dame Ann Dowling, as mentioned in the announcement of the general meeting to be published, will retire as non-executive director of bp at the close of bp’s general meeting on May 12, 2021. Dame Ann will retire alongside the previously announced resignation of Brendan Nelson at the same time.

CANADIAN INTEGRATED

No major news.

US E & PS

NextDecade Corporation and Oxy Low Carbon Ventures, a subsidiary of Occidentalannounced that they have created a term sheet for the abstraction and permanent geological storage of CO2 derived from NextDecade’s proposed Rio Grande LNG project in the Port of Brownsville, Texas.

No agreement has yet been reached between the state-owned Mexican Pemex and Pemex Talos Energyon the future of a lucrative shared oil deposit as deadline expired Thursday, but they will keep talking, three sources with direct knowledge of the matter told Reuters.

Talos Energy announced that the unification process of the Zama field will enter the next phase as set out in the Mexican ordinance. The Mexican Department of Energy is now required to propose final terms for a Unitization and Unit Operating Agreement (“UUOA”) based on international best practices and taking into account the parties’ input.

CANADIAN E & PS

Touchstone exploration reported on its operating and financial results for the year ended December 31, 2020. It recorded a net loss of $ 11,030,000 ($ 0.06 per share) compared to a net loss of $ 5,620,000 ($ 0.04 per share) in 2019 due to a recorded impairment loss of $ 11,418,000 in the year mainly due to lower forecast crude oil prices. The company also reported cash flow from operations of $ 263,000 in 2020 compared to $ 6,840,000 the previous year. Oil sales recorded in 2020 were down 49 percent, or $ 19,062,000, from 2019. This reflects a 34 percent decrease in realized sales prices as a result of the COVID-19 pandemic and a 24 percent decrease in crude oil production volume due to limited capital and operational investments.

OIL FIELD SERVICES

KBR announced that the Board of Directors has approved a 10% increase in the quarterly dividend. A dividend of $ 0.11 per share on the company’s common stock, with a par value of $ 0.001 per share, will be paid on April 15, 2021 to shareholders of record on April 5, 2021.

DRILL

No major news.

Refineries

No major news.

MLPS & PIPELINES

Crestwood Equity Partners LP announced that Crestwood Gas Services Holdings LLC, a company controlled by a First Reserve-sponsored mutual fund, has valued a private placement of six million joint shares representing Crestwood’s limited partner interests for gross proceeds of $ 132 million. The private placement is expected to close on March 30, 2021 subject to customary closing conditions. Crestwood is not selling any joint units and will not receive any proceeds from the private placement.

Crestwood Equity Partners LP announced that Crestwood Holdings LLC and Crestwood Holdings LLC have entered into a series of definitive agreements whereby Crestwood will acquire approximately 11.5 million joint units and general partner interest from Crestwood Holdings for a total of approximately $ 268 million. In addition, in a separate press release released today, Crestwood announced that First Reserve has announced a private placement of six million joint units for total proceeds of $ 132 million. With the combination of these transactions, First Reserve expects to have completed its investment in Crestwood. Crestwood will withdraw the approximately 11.5 million shares currently outstanding from First Reserve and move it to a publicly elected board of directors. In addition, the Board of Directors has approved an opportunistic joint and preferential unit buyback program for $ 175 million.

MARKET COMMENTARY

Stock futures rose slightly early Friday as Wall Street appeared to end the volatile week at a high level. European stocks rose, aided by gains in commodity-linked companies. Japan’s Nikkei closed higher as investors rallied seedy names following their sharp retreat this week. The dollar was in the green on hopes of US economic data improving as gold prices stabilized. Oil prices rose amid growing fears that it could take weeks for a giant container ship to block the Suez Canal, limiting supplies of crude oil and refined products. Advance trade balance, wholesale inventory, and personal income data are due on the US economic plan.

NASDAQ ENERGY TEAM THINK GUIDANCE

The Nasdaq Advisory Services energy team is part of Nasdaq’s Advisory Services – the most experienced team in the industry. The team provides unmatched shareholder research, a comprehensive view of trading and investor activity, and insights into how to best manage investor relations public relations. If you have any questions, please contact Tamar Essner.

This announcement, and the content found by following a link herein, is made available to you by Corporate Solutions, a company of Nasdaq, Inc. and some of its subsidiaries (collectively, “Nasdaq”) for informational purposes only. Nasdaq makes no representation or warranty with respect to this release or any such content, and expressly disclaims any implied warranties. Sources are Reuters, TR IBES, WSJ, The Financial Times, and proprietary Nasdaq research.

The views and opinions expressed are those of the author and do not necessarily reflect those of Nasdaq, Inc.

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