SECTOR COMMENTARY:
Energy stocks were higher as broader benchmarks added to a three day rally. Traders awaited key inflation data and weighed the economic threat of the omicron variant.
Oil headed for its biggest weekly gain in more than three months after the deepest fears over the new virus strain receded, though traders remained on edge over the demand outlook. WTI is up 7.4% this week, as fuel consumption has so far escaped a major blow from the omicron variant. Yet the mood remained fragile after a sell-off on Thursday amid rising infections and renewed restrictions by some governments to contain the spread. There are other bearish signs mounting. Traders are facing the prospect of a weakening physical market for crude in Asia, despite Saudi Arabia’s move to increase oil prices for January. Times spreads have neared contango which is a bearish indicator.
U.S. natural gas futures edged up to their highest in a week on Friday on forecasts for heating demand to rise in a couple of weeks with a seasonal cooling of the weather.
Traders noted that price rise came even though the weather was still expected to remain milder than normal through late December.
BY SECTOR:
US INTEGRATEDS
A consortium consisting of Qatar Energy and ExxonMobil has signed an agreement with Cyprus for energy exploration and production sharing in Block 5 in the southeast of the island, Qatari News Agency said.
INTERNATIONAL INTEGRATEDS
TechnipFMC has been awarded three frame agreements by Petrobras that reaffirm the Company’s leadership position in Brazil’s flexible pipe market – the industry’s largest and most established market. Altogether, the frame agreements form a large contract for TechnipFMC.
Siccar Point CEO Jonathan Roger said that Royal Dutch Shell’s decision last week not to progress the Cambo oilfield project in the British North Sea means the development will have to be paused.
Royal Dutch Shell PLC shareholders voted overwhelmingly on Friday in favour of a plan to end the company’s dual share structure and move its headquarters to London from The Hague.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
Cowen and Company upgraded SM Energy to Outperform from Market Perform.
Talos Energy announced that the two representatives of Apollo Global Management and one of the two representatives of Riverstone Holdings have resigned from the Company’s Board of Directors. Olivia C. Wassenaar and Christine Hommes, the representatives of Apollo, resigned on December 8, 2021, effective immediately. Apollo therefore no longer has any representatives on the Talos Board of Directors. Rajen Mahagaokar, a representative of Riverstone, resigned on December 9, 2021, effective immediately. Robert M. Tichio continues to serve as a representative of Riverstone on the Company’s Board of Directors. Following these changes, private equity employees account for one of seven current Board members. These resignations are not due to any issues or concerns specific to Talos. Apollo’s Board members are resigning as a result of Apollo funds’ reduced ownership after recent share sales from long-dated funds holding their Talos shares.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
Truist Securities upgraded Martin Marietta Materials to Buy from Hold.
TechnipFMC has been awarded three frame agreements by Petrobras that reaffirm the Company’s leadership position in Brazil’s flexible pipe market – the industry’s largest and most established market. Altogether, the frame agreements form a large contract for TechnipFMC.
DRILLERS
Citi upgraded Patterson-UTI Energy to Buy from Neutral.
Valaris announced that Famatown Finance Limited, a company indirectly controlled by trusts settled by John Fredriksen and a member of The Seatankers Group, has accumulated through open market transactions approximately 5% of the common shares of Valaris.
REFINERS
No significant news.
MLPS & PIPELINES
Citi downgraded Shell Midstream Partners to Neutral from Buy.
MARKET COMMENTARY
Wall Street futures rose, while world stocks slipped in caution, ahead of key U.S. inflation data that could prompt the Federal Reserve to start stimulus tapering earlier than anticipated. The dollar held its ground and gold prices fell to a one-week low as traders prepared for inflation figures. Oil remained on track for its biggest weekly gain since late August on easing concerns over the impact of the Omicron coronavirus variant.
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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