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Oil Prices Flat on Worries of Impending Interest Rate Hikes

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The energy sector is set for a mixed-to-higher start, supported by strength in natural gas futures and the broader markets, despite weakness in the crude complex. U.S stocks are set to open mostly higher a day after a brutal sell-off on Wall St, as the market awaits to digest more inflation data.

WTI and Brent crude are near the flatline during a choppy morning of trading as investors remain concerned the Federal Reserve will continue to aggressively raise interest rates which will put a dent in oil demand. The IEA in its September MOMR today expects global oil demand growth to come to a halt in 4Q22 and with supply outpacing demand into 2Q23, there should be a “much needed” build in stocks. Growth in global oil demand continues to decelerate, weighed down by renewed Chinese lockdowns and an ongoing slowdown in the OECD. Additionally, the Biden administration is looking at refilling the SPR at $80/barrel oil as Secretary of State Blinken stated a new nuclear agreement with Iran in the near-term was unlikely.

Natural gas futures are up as record levels of output continue to lend support and on forecast for higher demand in the next two weeks than previously expected.

BY SECTOR:

US INTEGRATEDS

Reuters reported that Colombia’s state-run oil company Ecopetrol has asked the oil regulator to suspend contracts for two fracking pilot projects for 90 days. The two projects – being developed in Santander province by Ecopetrol and Exxon Mobil – have faced stiff resistance from environmental groups and could be halted outright if a law backed by the administration of new leftist President Gustavo Petro passes congress.

INTERNATIONAL INTEGRATEDS

ADNOC Refining, a joint venture company between the Abu Dhabi National Oil Company (ADNOC), Eni, and OMV, is set to complete the first phase of its innovative Waste Heat Recovery project at the General Utilities Plant in Ruwais, Abu Dhabi.

Reuters reported that Equinor became the first Western oil major to fully exit Russia this month, avoiding the high-profile clashes with Moscow experienced by some rivals – but it also paid a price. According to three industry sources, Russia’s Rosneft paid just one euro ($1) for Equinor’s main assets, while also allowing the state-controlled Norwegian group to forgo future liabilities and investment commitments.

Reuters reported that BlackRock has held meetings with investors in London to drum up interest in a bond sale to begin refinancing a $13.4 billion loan that backed the asset manager’s deal to buy a stake in Saudi Aramco’s gas pipelines network, two sources said on Tuesday.

CANADIAN INTEGRATEDS

No significant news.

U.S. E&PS

ConocoPhillips announced that its board of directors has elected Mr. Dennis V. Arriola to serve as a board member.

CANADIAN E&PS

No significant news.

OILFIELD SERVICES

Compass Minerals announced that Koch Minerals & Trading, LLC (KM&T), a diverse global trading, logistics and investment company and subsidiary of Koch Industries, Inc. (KII), has agreed to make a $252 million investment in Compass Minerals through the purchase of Compass Minerals common stock to support phase-one development of its previously identified 2.4 mMT lithium carbonate equivalent (LCE) Great Salt Lake resource and debt reduction.

Granite announced that it has been awarded an approximately $20 million dollar construction contract by the Tucson Airport Authority (TAA) to reconstruct an outboard taxiway (Taxiway C) at the Tucson International Airport (TUS), in Tucson, Arizona, as part of the TAA’s estimated $400 million, multi-year Airfield Safety Enhancement Program. This will be the second work package awarded as part of the previously announced $130 million multi-year Construction Manager at Risk (CMAR) project to demolish an existing runway and re-construct a new relocated commercial runway, center taxiway, and outboard taxiway that will parallel the existing main runway at TUS. The project is primarily funded through an FAA Airport Improvement Grant (AIP) with additional funding expected from the recently passed Infrastructure Bill prior to the start of construction. The award is anticipated to be included in Granite’s 4th quarter CAP.

Schlumberger and Cognite announced a strategic partnership to integrate Schlumberger’s Enterprise Data Solution for subsurface with Cognite Data Fusion, Cognite’s leading open industrial DataOps platform. Through this partnership, customers can integrate data from reservoirs, wells, and facilities in a single, open platform, and leverage embedded AI and advanced analytics tools to optimize production, reduce costs and decrease operational footprint.

DRILLERS

Transocean announced that it has executed privately negotiated exchange and purchase agreements relating to certain of the 0.50% Exchangeable Senior Bonds due 2023 and certain of the 7.25% Senior Notes due 2025 issued by Transocean Inc., Transocean’s wholly-owned subsidiary. In aggregate, these transactions provide Transocean with an incremental $175 million in liquidity, further improving the flexibility of the company’s balance sheet.

REFINERS

Reuters reported that Marathon Petroleum began shutting a diesel-producing hydrocracker at its 593,000 barrel-per-day (bpd) Galveston Bay Refinery in Texas City, Texas, on Tuesday as part of an overhaul.

MLPS & PIPELINES

Reuters reported that TC Energy sees bringing on additional 1.3 billion cubic feet per day (bcf/d) of capacity in 2022, with current capital program adding additional 2.2 bcf/d between 2023 and 2026.

MARKET COMMENTARY

Wall Street futures rose as technology stocks rebounded from sharp declines in the previous session on rate hike worries triggered by weak inflation data, while investors also waited for producer prices data scheduled for release later in the day. European shares were trading in the red. Japan’s Nikkei ended sharply lower. The Japanese yen advanced against the dollar on reports of Bank of Japan preparing for currency intervention, while spot gold prices edged higher. Oil prices stabilised following signs of bullish demand in the IEA report.


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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