SECTOR COMMENTARY:
The energy sector is poised for a mixed to lower start, pressured by weakness in the crude complex but supported by strength in broader equity futures which rose as investors looked ahead to the Federal Reserve’s meeting later this week where policymakers are likely to signal faster tapering of monetary stimulus.
WTI and Brent crude oil futures inched lower this morning, weighed down by new concerns about the Omicron coronavirus variant and doubts around the effectiveness of vaccines against it were weighing on prices but reports that OPEC+ raised their demand forecasts helped stem the declines. OPEC raised its world oil demand forecast for the first quarter of 2022, but left its full-year growth prediction steady, saying the Omicron coronavirus variant would have a mild impact as the world gets used to dealing with the pandemic. Ahead of their meeting on Jan. 4 to decide on their output policy, Iraq’s oil minister yesterday said he expects OPEC at its next meeting to maintain its current policy of gradual monthly increases in supply by 400,000 bpd.
Natural gas futures are up sharply higher in early trading, just off a fresh one-week high, backed by forecasts for colder weather and higher demand next week than previously expected and an 11% jump in European gas prices that should keep U.S. LNG exports near record highs. Gas prices in Europe soared to their highest since hitting a record in early October on rising demand expectations and renewed concerns that Russia will hold back gas exports to Europe over delays to the startup of Gazprom PAO’s Nord Stream 2 gas pipe from Russia to Germany. U.S. Secretary of State Antony Blinken said on Sunday that gas is unlikely to flow through Nord Stream 2 if Russia renews its aggression against Ukraine.
BY SECTOR:
US INTEGRATEDS
No significant news.
INTERNATIONAL INTEGRATEDS
Petrobras said that the country’s oil regulator ANP has approved a production agreement for the Mero oilfield, deciding on which stake of its oil and gas output will be hold by each company starting in Jan 2022, Reuters reported. Such an agreement is signed when the area of an oil deposit exceeds previously contracted areas, Petrobras said. Petroleo Brasileiro SA, as the company is formally known, said in a securities filing it will own 38.6% of Mero’s so-called shared deposit, while Shell Brasil and TotalEnergies will hold 19.3% each.
According to Reuters, Qatar Energy will acquire a 17% stake in two Shell-operated concessions (Block 3 and Block 4) in Egypt’s Red Sea region, Shell Egypt said on Monday. Shell will remain the main operator of the concessions, Shell Egypt’s statement added.
CANADIAN INTEGRATEDS
Suncor released its 2022 corporate guidance today which supports the previous announcements of doubling the dividend, increasing share buybacks and lowering the capital program by $300 million. The 2022 guidance reflects strong operational performance across all assets and continued capital and cost discipline. Highlights include: Upstream production of 750,000 to 790,000 barrels of oil equivalent per day (boe/d), approximately 5% higher than the expected 2021 levels, supported by the Fort Hills ramp-up to full rates and partially offset by the sale of Golden Eagle; Record Synthetic Crude Oil (SCO) production capturing the additional upgraded crude value, approximately 5% higher than 2021 expected levels; Refinery throughput in-line with 2019 levels and highest anticipated sales in the company’s history from our industry leading downstream business, positioned to capture strong and improving consumer demand, and; Capital program of $4.7 billion, 6% or $300 million below the previously announced $5 billion planned capital program ceiling.
U.S. E&PS
Southwestern Energy announced the proposed underwritten block trade of 63,976,376 shares of its common stock by certain shareholders who received their shares as part of Southwestern Energy’s acquisition of Indigo Natural Resources LLC. The shares will be offered from time to time for sale in one or more transactions on the New York Stock Exchange, in the over-the-counter market, through negotiated transactions or otherwise at market prices prevailing at the time of sale. Southwestern Energy will not sell any shares of its Common Stock in the Offering and will not receive any proceeds from the sale by the Selling Stockholders of shares of their Common Stock.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
Halliburton and Exxon Mobil are in talks over the oil company’s stake in the West Qurna-1 field in southern Iraq, the country’s oil minister said, Bloomberg reported. Iraq supports a U.S. partner for Exxon’s stake in the oil field, Oil Minister Ihsan Abdul Jabbar told reporters in Baghdad. If the talks with Halliburton fail, Iraq will step in to buy the stake, he added. He said a few days ago that Basra Oil Co. could also be a potential buyer.
Secure Energy Services announced that its Board of Directors has declared a quarterly dividend of $0.0075 (0.75 cents) per common share payable on or about January 17, 2022, to shareholders of record on January 1, 2022. This dividend is an eligible dividend for the purpose of the Income Tax Act (Canada).
DRILLERS
Seadrill Limited announced that it has secured a contract with Petroleo Brasileiro S.A. for work in the Búzios field offshore Brazil for the West Jupiter. The contract is for a firm term of 1,040 days with commencement expected in December 2022. Total contract value is approximately $264m (inclusive of mobilization revenue and additional services).
REFINERS
No significant news.
MLPS & PIPELINES
No significant news.
MARKET COMMENTARY
Wall street futures edged higher while world stocks firmed, as a generally upbeat mood took hold of world markets ahead of a host of central bank meetings this week that includes the U.S. Federal Reserve. The dollar edged higher and gold prices steadied. Oil was lower, weighed by new concerns about the Omicron coronavirus variant and doubts around the effectiveness of vaccines against it.
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.
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