SECTOR COMMENTARY:
The energy sector is poised for a lower start, tracking weakness across the underlying commodities while major equity futures are flat as investors weigh a jump key inflation data against the start of earnings season.
WTI and Brent crude oil futures are down ~1% in early trading, faltering as expectations grew that oil demand growth will fall as inflation and supply chain issues strain major economies, though surging prices for power generation fuel limited losses. A strong U.S. dollar, trading near a one-year high, also weighed on oil prices. The markets are awaiting U.S. oil inventory data, delayed by a day following the Columbus Day holiday on Monday.
Following yesterday’s 3% rally, natural gas futures dipped lower this morning on forecasts calling for the weather to remain milder than normal through the end of October. Traders noted prices were down despite a decline in output over the past couple of days, forecasts for higher heating use over the next two weeks than previously expected, and a 6% increase in gas prices in Europe.
BY SECTOR:
US INTEGRATEDS
Exxon Mobil said that a vote to remove the United Steelworkers union (USW) from representing locked-out workers at its Beaumont, Texas, refinery would go forward no matter the outcome of a contract ratification vote next week by those same workers.
INTERNATIONAL INTEGRATEDS
Brazil’s lower house Speaker Arthur Lira said he does not believe that a change in state-run oil company Petrobras’ pricing policy is the solution for the high fuel and gas prices faced by the country.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
MKM Partners downgraded Continental Resources to Neutral from Buy.
On October 5, 2021, Rattler Midstream, a subsidiary of Diamondback Energy, completed an acquisition of a majority interest in a Midland Basin gas gathering and processing company from West Texas Gas, Inc. and its affiliates through a joint venture. Rattler invested approximately $104 million in cash to acquire a minority interest in the joint venture. The joint venture’s assets primarily consist of an interconnected gas gathering system and six major gas processing plants servicing the Midland Basin with 925 MMcf/d of total processing capacity with additional gas gathering and processing expansions planned.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
Compass Minerals announced the appointment of Gareth Joyce to the company’s board of directors. Joyce brings extensive experience in the transportation sector, with a focus on electric vehicle battery technology and markets.
DRILLERS
No significant news.
REFINERS
Phillips 66 and Plug Power Inc. announced that the companies have signed a memorandum of understanding to collaborate on the development of low-carbon hydrogen business opportunities.
MLPS & PIPELINES
Summit Midstream Partners announced that, subject to market and other conditions, Summit Midstream Holdings, LLC, a Delaware limited liability company, and Summit Midstream Finance Corp., a Delaware corporation, which are subsidiaries of the Partnership, commenced a private offering of up to $700,000,000 aggregate principal amount of Senior Secured Second Lien Notes due 2026. The Notes are expected to pay interest semi-annually and will be jointly and severally guaranteed, on a senior second-priority secured basis, by the Partnership and each restricted subsidiary of the Partnership (other than the Co-Issuers) that is an obligor under the credit agreement by and among Summit Holdings, as borrower, Bank of America, N.A., administrative agent and trustee and the several lenders and other agents party thereto, which Summit Holdings expects to enter into on or about the date on which the Notes are issued, or under the Co-Issuers’ 5.75% Senior Notes due 2025 on the issue date of the Notes.
MARKET COMMENTARY
Futures of Wall Street’s major indexes were higher ahead of U.S. consumer price data. Upbeat earnings forecast from German software group SAP and robust quarterly sales for French luxury goods maker LVMH helped most European stocks recoup early losses. China stocks ended higher as better-than-expected domestic trade data eased slowdown fears fanned by a power crunch and Evergrande’s debt crisis. Oil prices dipped on demand concerns. Gold prices rose, boosted by worries over economic growth and a slight retreat in the dollar. Minutes of the U.S. Federal Reserve’s September policy meeting are also due later in the day.
NASDAQ ENERGY TEAM THOUGHT LEADERSHIP
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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