SECTOR COMMENTARY:
Energy stocks are set to open higher, with further strength in oil prices, trading around 6-week highs, lifting the group. Additionally, broader equity futures jumped moments ago after CPI data showed a tamer rise than some of the more aggressive forecasts had expected. CPI rose 0.3% versus the estimate of +0.4%, which temporarily calmed some market worries of rampant price increases. In sector news, Chevron unveiled further details around its capital investment to grow its lower carbon energy business.
Oil prices hit a six-week high on Tuesday as Hurricane Nicholas weakened into a tropical storm, bringing the threat of widespread floods and power outages to Texas and Louisiana, and as the IEA forecast a big demand rebound for the rest of the year. Both contracts have risen for three consecutive sessions and were trading near their highest since early August. Nicholas is the second major storm to threaten the U.S. Gulf region in recent weeks. Evacuations were underway on Monday from offshore oil platforms in the area, as onshore oil refiners began preparing for Nicholas. “The substantial production outages in the Gulf of Mexico remain one of the factors driving prices,” Commerzbank said.
Natural gas futures are higher by another 10 cents, currently trading around $5.33, as the commodity continues to charge higher on tight supplies and still conservative domestic production expectations.
BY SECTOR:
US INTEGRATEDS
During its Energy Transition Spotlight, Chevron announced plans to invest more capital to grow lower carbon energy businesses. Building on its strengths, the company set the following 2030 growth targets for new energy businesses: Grow renewable natural gas production to 40,000 MMBtu per day to supply a network of stations serving heavy duty transport customers; Increase renewable fuels production capacity to 100,000 barrels per day to meet growing customer demand for renewable diesel and sustainable aviation fuel; Grow hydrogen production to 150,000 tonnes per year to supply industrial, power and heavy duty transport customers; and Increase carbon capture and offsets to 25 million tonnes per year by developing regional hubs in partnership with others. To achieve this scale, the company expects to invest more than $10 billion between now and 2028, including $2 billion to lower the carbon intensity of Chevron’s operations. This is more than triple the company’s previous guidance of $3 billion.
INTERNATIONAL INTEGRATEDS
According to Reuters, BP‘s head of low carbon and natural gas Dev Sanyal will leave the energy company at the end of the year, BP said on Tuesday, an unexpected departure at a time when BP seeks to rapidly grow its renewables business and shift away from oil. Sanyal, joined BP 32 years ago, will be replaced by Anja-Isabel Dotzenrath, who until recently was chief executive officer of RWE Renewables. She will join BP on March 1, 2022.
Eni and Atlantia’s airport unit Aeroporti di Roma have signed an agreement to develop biofuel for aviation to fight climate change, the two Italian groups said on Tuesday, Reuters reported.
According to Reuters, Royal Dutch Shell Plc‘s 302,800 barrel-per-day (bpd) joint-venture Deer Park, Texas refinery was operating normally on Tuesday morning after the passage of Hurricane Nicholas, said sources familiar with plant operations. Nicholas caused widespread power outages as it crossed over the Houston metropolitan area late Monday night and early Tuesday morning.
CANADIAN INTEGRATEDS
Cenovus Energy completed a public offering in the United States of US$1,250,000,000 in senior notes, consisting of US$500,000,000 of 2.650% senior unsecured notes due 2032 and US$750,000,000 of 3.750% senior unsecured notes due 2052. The Notes were issued under Cenovus’s short form base shelf prospectus dated September 19, 2019 and a prospectus supplement dated September 9, 2021 filed with securities regulatory authorities in Canada and the United States.
U.S. E&PS
No significant news.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
Halliburton Company announced it was awarded an integrated services contract to execute a three to five well drilling and completions campaign for Energean, an independent E&P company focused on developing resources in the Mediterranean and the North Sea. The work follows a successful four well offshore drilling campaign that Halliburton previously executed in the Karish and Karish North gas fields.
KBR announced a strategic partnership with Adarga, one of the UK’s leading developers of artificial intelligence (AI) analytics software for defense and national security. KBR’s Government Solutions business will integrate Adarga’s leading-edge AI software platform into the delivery of a number of its large-scale programs across the defense and national security sectors – putting effective, data-driven decision-making at the heart of how they operate
DRILLERS
Citi upgraded RPC to Neutral from Sell.
REFINERS
Phillips 66 continued pumping floodwater from its 255,600 barrel-per-day Alliance, Louisiana, refinery on Monday, two weeks after it was shut ahead of Hurricane Ida, a company spokesman said. The company continues to assess damage at the refinery, located 20 miles (32 km) south of New Orleans, from the powerful hurricane, said spokesman Bernardo Fallas.
MLPS & PIPELINES
Cheniere Energy Partners announced that it has priced its previously announced offering of Senior Notes due 2032. The CQP 2032 Notes will bear interest at a rate of 3.25% per annum and will mature on January 31, 2032. The CQP 2032 Notes are priced at par, and the closing of the offering is expected to occur on September 27, 2021.
MARKET COMMENTARY
Wall Street futures rose after lighter than expected inflation data was released. European stocks slipped, weighed down by weakness in luxury and mining shares. Japan’s Nikkei closed at a more than 31-year high, supported by gains in cyclical stocks. The dollar index was little changed, while gold prices were in the negative territory.
NASDAQ ENERGY TEAM THOUGHT LEADERSHIP
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