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Oil Prices Rise on Supply Constraints, Rising Geopolitical Tensions with Russia

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The energy sector is set for a higher start, supported by strength in the underlying commodities. U.S. stocks edged up as investors brace themselves for today’s Federal Reserve policy meeting where a large interest rate hike is expected. 

WTI and Brent crude oil futures are up in early trading on supply constraints and geopolitical risks. OPEC+ reported their production shortfall hit a record 3.58M bpd or 3.5% of global demand which has put supply concerns back into focus. Overnight, Moscow said they would call up 300,000 fresh troops and implied the use of nuclear weapons, raising the risks of new sanctions against Russia. Additionally, at this week’s United Nations General Assembly, the United States said it doesn’t expect to reach a deal to bring Iranian oil back to the markets anytime soon. 

Natural gas futures rose this morning, gaining on high gas prices in Europe and forecasts for more demand than previously expected. 

BY SECTOR:

US INTEGRATEDS

Air Liquide, Chevron, Keppel Infrastructure, and PetroChina announced they have signed a memorandum of understanding to form a consortium which will aim to evaluate and advance the development of large-scale carbon capture, utilization, and sequestration (CCUS) solutions and integrated infrastructure in Singapore. The consortium intends to research, test, and develop technological, logistical, and operational solutions for CCUS in Singapore.

Strike action has reduced output at Exxon Mobil’s 240,000 barrel per day (bpd) Port Jerome-Gravenchon oil refinery and Notre Dame de Gravenchon (NDG) petrochemical site in France, the company said.

INTERNATIONAL INTEGRATEDS

BP said it shut its 150,800 barrel-per-day Toledo, Ohio, refinery after a fire, which injured two.

Eni UK announced that it has submitted through the North Sea Transition Authority (NSTA) system a Carbon Storage License Application for the Hewett depleted gas field on the Southern North Sea for the development of a CCS project aimed at decarbonising the Bacton and Thames Estuary area.

Petrobras informed that it has carried out the payment of the 2nd installment of the remuneration to shareholders approved by its Board of Directors in a meeting held on 07/28/2022. The gross amount distributed corresponds to dividends of R$ 3.366001 per outstanding common.

TotalEnergies expects to pay about $30 billion in terms of taxes and production taxes worldwide this year, its chief executive Patrick Pouyanne told a French parliament committee hearing. Pouyanne said that compared with $16 billion paid in 2021 and $6 billion in 2020.

Reuters reported that TotalEnergies should pay out about 8 bln euros in dividends this year, according to CEO.

CANADIAN INTEGRATEDS

No significant news.

U.S. E&PS

EQT announced that it has priced an underwritten public offering of $1.0 billion in aggregate principal amount of senior notes consisting of $500 million in aggregate principal amount of its 5.678% senior notes due 2025 and $500 million in aggregate principal amount of its 5.700% senior notes due 2028. EQT expects the Offering to close on October 4, 2022, subject to the satisfaction of customary closing conditions.

Magnolia Oil & Gas announced that Christopher Stavros, the Company’s current Executive Vice President and Chief Financial Officer, has been named President and Chief Executive Officer, and has been appointed to the Board of Directors, effective immediately. Stephen Chazen, who has served as Chairman, President and Chief Executive Officer since 2018 will no longer be able to serve in his positions due to serious health reasons. Mr. Stavros will continue to serve as the Company’s Chief Financial Officer until a permanent successor is appointed.

MKM Partners assumed coverage on Matador Resources with a Buy rating.

SilverBow Resources, Inc  adopted the Rights Plan in response to recent significant accumulations of portions of SilverBow outstanding common stock. The Rights Plan is similar to other rights plans adopted by publicly held companies and is intended to promote the fair and equal treatment of all stockholders. The Rights Plan is designed to enable all Company stockholders to realize the long-term value of their investment and is intended to protect SilverBow and its stockholders from efforts by a single stockholder or group to obtain control of the company without paying a control premium.

CANADIAN E&PS

No significant news.

OILFIELD SERVICES

Granite announced that is has been awarded two construction contracts worth approximately $107 million on State Highway 288 near Houston, Texas. When combined with the previously announced $40 million contract on a different segment of SH 288, the additional segments give Granite more than $145 million of work on SH 288. The contracts were awarded and will be funded by the Texas Department of Transportation. They are anticipated to be included in Granite’s third quarter CAP.

Schlumberger and Aramco have announced plans to collaborate and develop a digital platform that will provide sustainability solutions for hard-to-abate industrial sectors. The proposed platform will enable companies in industries such as oil and gas, chemicals, utilities, cement and steel to collect, measure, report and verify their emissions, while also evaluating different decarbonization pathways.

Schlumberger announced the commercial release of the Schlumberger Enterprise Data Solution, which is powered by Microsoft Energy Data Services. Developed to deliver the most comprehensive capabilities for subsurface data—in alignment with the emerging requirements of the OSDU Technical Standard, a new open industry standard for energy data—the Enterprise Data Solution makes data accessible on an unprecedented scale for the global energy industry.

Exane BNP Paribas upgraded TechnipFMC PLC to Outperform from Neutral.

DRILLERS

No significant news.

REFINERS

Wells Fargo Securities downgraded HF Sinclair Corporation to equal Weight from an overweight rating.

JPMorgan upgraded PBF Energy to Overweight from Neutral.

Valero Energy and Marathon Petroleum are the biggest beneficiaries of the U.S. government’s oil reserve releases, taking nearly half the crude offered, a Reuters analysis of Department of Energy data showed.

A power interruption on Tuesday resulted in flaring at Valero Energy’s 225,000 barrel-per-day (bpd) refinery in Texas City, the city’s emergency management department said on Twitter.

MLPS & PIPELINES

Cheniere Energy and Cheniere Energy Partners, L.P. announced the promotion of Corey Grindal to Executive Vice President and Chief Operating Officer, effective January 2, 2023. As Executive Vice President and Chief Operating Officer, Grindal will lead the Operations, Engineering and Construction, Shared Services and Worldwide Trading organizations within Cheniere. In his new role, he will continue to report to Jack Fusco, President and Chief Executive Officer. Grindal will also serve as Executive Vice President and Chief Operating Officer at Cheniere Partners.

Nordic American Tankers said: “One of our suezmax tankers (2010 built) today commenced a 1 year Time Charter Contract with one of the world’s largest energy companies at a rate in excess of $ 30,000 per day. The NAT fleet is counting 20 suezmax vessels. The uniform fleet of suezmax tankers only is a trademark of NAT. The operating expenses of our vessels are on average $8,000 per day.”

Allseas has been awarded a substantial construction contract by TC Energy for a major offshore pipeline delivering natural gas to southeast Mexico.

MARKET COMMENTARY

U.S. stock index futures were little changed as investors awaited another likely aggressive interest rate hike from the Federal Reserve. European shares edged up, though gains were limited after Russian President Putin ordered a mobilization over Ukraine, which helped the dollar hit a new two-decade high. Asian equities ended in the red, with Nikkei closing at a two-month low. Gold prices rose on safe-haven bets. Oil surged over 2% on concerns of tighter oil and gas supply.


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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