The energy sector is poised for a lower start, pressured by weakness in the underlying commodities and in the major equity futures. U.S. stock index futures fell sharply as higher-than-expected job additions in November poured cold water on investor expectations of the Federal Reserve easing its aggressive monetary policy tightening.
WTI and Brent crude oil futures turned negative following the release of November payroll data, speculation ahead of OPEC+ meeting on Sunday and the EU ban on Russian crude. OPEC+ is widely expected to stick to its latest target of reducing oil production by 2 million bpd when it meets on Sunday. China is set to announce an easing of its COVID-19 quarantine protocols within days, which would be a major shift in policy in the world’s second biggest oil consumer, although analysts warn a significant economic reopening is likely to be months away. Meanwhile, European Union governments tentatively agreed on a $60 a barrel price cap on Russian seaborne oil with an adjustment mechanism to keep the cap at 5% below the market price.
Natural gas futures are trading lower as the NOAA’s 6-10 day outlook shows below-normal temps across the central and eastern US, as well as in the West, northern to central Great Plains, and Midwest. Above-normal temps are seen for TX, the Gulf Coast States, and Southeast.
BY SECTOR:
US INTEGRATEDS
Chevron is unlikely to add investment in Venezuela in the next six months despite a recent U.S. license to allow it to expand its operations in the South American country, Chief Executive Michael Wirth said.
Chevron said it along with emergency crews responded to an isolated fire inside its 269,000 barrel-per-day El Segundo, California refinery.
INTERNATIONAL INTEGRATEDS
Plenitude, the renewable energy unit of Eni, has agreed to buy 100% of wind and solar developer PLT, it said, strengthening its presence in Italy and Spain.
Repsol has received approval to withdraw from two oil-and-gas exploration areas in the Gulf of Mexico, the Mexican oil regulator said on Thursday, weeks after the company vacated three other spots.
Bloomberg reported that Nigeria’s Supreme Court said a Shell Plc subsidiary can appeal a judgment directing the company to pay compensation over alleged pollution in a legal dispute that is holding up the oil giant’s efforts to sell assets in the West African country.
TotalEnergies said it has joined a shipping project building test tankers which can be powered by ammonia, part of moves to speed up maritime industry decarbonisation.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
EQT said the Federal Trade Commission has asked for more information on its planned $5.2 billion buyout of THQ Appalachia I LLC and associated pipeline infrastructure.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
Newpark Resources announced it has completed the previously announced sale of substantially all the long-lived assets, inventory and operations of its Excalibar mineral grinding business to Cimbar Resources. Separately, the Company announced it has also completed the sale of the Conroe, Texas blending and warehouse facility. Combined, these divestitures are expected to generate net cash of nearly $80 million, including a combined $63 million of net cash proceeds received at closing, along with cash generated from the ongoing wind-down of working capital. The proceeds are expected to be used for general corporate purposes, including debt reduction, investment in higher returning opportunities, and the return of value to shareholders through share repurchases.
DRILLERS
No significant news.
REFINERS
No significant news.
MLPS & PIPELINES
As per SEC filing, Holly Energy Partners LP said it sees for fiscal year 2023 total hep capital expenditures of $30.0 mln to $45.0 mln.
Summit Midstream Partners, LP announced that its wholly owned subsidiary, Summit Midstream Holdings, LLC, successfully closed on the previously announced DJ Basin acquisitions of Outrigger DJ Midstream LLC and Sterling Energy Investments LLC, Grasslands Energy Marketing LLC and Centennial Water Pipelines LLC for approximately $305 million in cash.
MARKET COMMENTARY
U.S. stock index futures edged lower, while European shares were in the red, as investors await the monthly jobs report for November, which would provide more clues on the Federal Reserve’s path of monetary tightening. The dollar slipped and gold eased into a tight range. Oil fell ahead of a meeting by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) on Sunday and an EU ban on Russian crude oil kicking in on Monday.
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