SECTOR COMMENTARY:
The energy sector is poised for a mixed start as commodities and stock futures struggle to find direction following yesterday’s relief rally. Lingering concerns about the new Omicron variant and its impact on global economic recovery continued to dampen sentiment while investors looked to a final GDP read, approval from the FDA for COVID-19 treatment pills from both Pfizer and Merck and a meeting later in the day, where President Joe Biden along with U.S. officials and private sector companies, will talk about ongoing efforts to address supply chain disruptions.
WTI and Brent crude oil futures are flat in early trading, steadying as fears of tight supply were offset by COVID-19 concerns after Singapore suspended quarantine-free travel and Australia renewed its vaccination push due to a surge in Omicron variant cases. Ahead of the official EIA data later today, last night’s API report showed U.S. crude stocks fell 3.7 million barrels for the week ended Dec. 17, significantly more than the 2.8 million barrel drop analysts expected.
Natural gas futures extended their swing higher for the third-straight session, shrugging off forecasts for milder weather and lower heating demand next week than previously expected, and focusing instead on a sharp rally in European gas futures that could keep U.S. liquefied natural gas exports near record highs.
BY SECTOR:
US INTEGRATEDS
No significant news.
INTERNATIONAL INTEGRATEDS
Enel X, Be Charge, a subsidiary of Eni gas e luce (from 2022 Plenitude), and Enihave signed agreements enabling electric drivers to fill up their vehicles with energy throughout Italy using the infrastructure of the three companies, which has around 20,000 electric charging points.
According to Reuters, Petrobras said it has signed an agreement with natural gas pipeline company Transportadora Associada de Gas SA to allow other natural gas players to use the asset from 2022.
Avenir LNG announced it has entered into a Time Charter Party with Shell NA LNG for the Avenir Achievement, a newbuild 20,000cbm LNG Bunkering Supply Vessel which will be delivered to Avenir in Q2 2022. The time charter to Shell is expected to begin in Q1 2023 for a period of 3 years with an option to extend up to 5 years.
CANADIAN INTEGRATEDS
Headwater Exploration announced that it has issued a call notice to Cenovus Marten Hills Partnership, a wholly-owned subsidiary of Cenovus Energy, requiring CMHP to exercise the 15,000,000 warrants to purchase common shares of the Company that CMHP holds. Each Warrant entitles CMHP to purchase one Common Share at an exercise price of $2.00.
U.S. E&PS
Pioneer Natural Resources announced that it has completed the previously announced divestiture of its Delaware Basin assets to Continental Resources for cash proceeds of $3.1 billion after normal closing adjustments. Pioneer’s fourth quarter and full year guidance assumed that the Delaware Basin assets would be included in the Company’s financial results for the entire quarter. However, with the completion of the divestiture today, Pioneer will not include any operating or financial results attributable to the Delaware Basin assets after December 20, 2021 in its fourth quarter results.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
KBR announced that it has been awarded a study to help establish a green hydrogen market in Trinidad and Tobago as part of an ongoing technical cooperation financed by the Inter-American Development Bank. Under the terms of the contract, KBR will analyze strategies for maximizing opportunities to establish a green hydrogen economy in Trinidad and Tobago, undertaking supply and demand dynamics for green hydrogen generation, transportation, and end use applications.
DRILLERS
No significant news.
REFINERS
No significant news.
MLPS & PIPELINES
According to SEC filing, Shell Midstream Partners owns a 16.125% interest in Colonial Enterprises, the parent of Colonial Pipeline Company. On December 17, 2021, the board of directors of Colonial elected not to declare a dividend for the quarter ended December 31,2021.
Raymond James resumed coverage of Enbridge at Market Perform.
Raymond James resumed coverage of TC Energy at Strong Buy.
MARKET COMMENTARY
Wall Street futures were mixed in a choppy trading amid fears surrounding the spread of Omicron COVID-19 variant. Gains in food-delivery stocks nudged European shares higher. Nikkei closed slightly higher, buoyed by a rally in chipmakers and other tech stocks, although gains were capped by weakness in Nintendo and sauce makers. The dollar fell, while gold prices were up. Oil prices rose as fears of tight supply were offset by COVID-19 concerns. The final reading of gross domestic product (GDP), consumer confidence and existing home sales data are on the economic radar.
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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