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Will Energy Stocks Rebound From Steep Sell-Off? .

Daily energy market commentary provided by Nasdaq Corporate Solutions Advisory Services' Energy Team.

Will Energy Stocks Rebound From Steep Sell-Off?

Thursday, July 12, 2018

Sector Commentary

Energy stocks are set to rebound from yesterday’s steep sell-off, underpinned by higher index futures and crude prices stabilizing around $70.85 and $74.25 on WTI and Brent, respectively.

Oil prices recouped some ground after sharp losses the previous session when Libya said it would resume oil exports.  The rally received a boost from the IEA, which said the world's oil supply cushion "might be stretched to the limit" due to production losses.  "Warnings from the IEA of a potential spare capacity crunch are helping the energy complex regain some ground following yesterday’s bloodbath," said Stephen Brennock, analyst at London brokerage PVM Oil Associates.

Natural gas futures traded within a few cents of unchanged as the market awaited the weekly inventory report expected to show a smaller-than-usual weekly storage build.  Analysts said utilities likely added just 55 bcf of gas to storage during the extremely hot week ended July 6.  That compared with increases of 59 bcf during the same week last year and a five-year average build of 77 bcf for the period.  If correct, the increase for the week ended July 6 will boost stockpiles to 2.207 tcf, leaving inventories 18.9% below the five-year average of 2.722 tcf for this time of year and the lowest for the week since 2014.

INTERNATIONAL INTEGRATEDS

Press Release - Eni, through its subsidiary Eni Finance International SA, completed the public offering of senior unsecured floating rate notes, due July 9, 2027, for gross proceeds of US$750 million.

(Late Wednesday) Reuters - Petroleo Brasileiro hiked its refinery output in June to supply more fuel to the domestic market, leading to a drop in crude oil exports for the month.

Press Release - Petroleo Brasileiro signed a Memorandum of Understanding with TotalSA and Total Eren, to analyze the joint business development in solar energy and wind onshore energy segments in Brazil.

(Late Wednesday) Press Release - Petrobras informed that its Board of Directors, at a meeting held today, appointed Mr. Durval José Soledade Santos to the position of member of the Company's Board of Directors, until the next Shareholders' Meeting, as provided for in Article 25 of the Bylaws. The position was vacant since May 29, 2018, as disclosed to the market on May 30, 2018.

U.S. E&PS

Press Release - ConocoPhillips announced a 50 percent increase in its planned 2018 share repurchase program, from $2 billion to $3 billion. The company expects to fully fund this year’s $3 billion program, as well as its dividend and capital expenditures, with cash from operations.

Press Release - Continental Resources announced that it will redeem $400 million in aggregate principal amount, representing approximately 20% of the $2.0 billion in aggregate principal amount currently outstanding, of its 5% Senior Notes due 2022 on August 16, 2018, the redemption date for the Notes.

Press Release - EQT Corporation declared a quarterly cash dividend of $0.03 per share, payable September 1, 2018, to shareholders of record at the close of business on August 10, 2018.

Riley downgraded SM Energy to ‘Neutral’ from ‘Buy’.

OILFIELD SERVICES

(Late Wednesday) Press Release - A subsidiary of Weatherford International signed a definitive agreement with ADES International Holding Ltd. for the sale of Weatherford's land drilling rig operations in Algeria, Kuwait and Saudi Arabia as well as two idle land rigs in Iraq, for an aggregate cash purchase price of $287.5 million.

DRILLERS

Press Release - Trinidad Drilling provided an operational update outlining increasing activity levels across its operations. In addition, the Company also announced the acquisition of GMXSteering. Activity levels across Trinidad's operations have improved throughout 2018 as strengthening commodity prices have driven increased customer demand. Activity in the US has increased, with demand remaining strong in the Permian Basin in Texas; but, also expanding to additional areas. In the US, Trinidad currently has 41 rigs earning revenue, up seven rigs or 21% from same time last year.

MLPS & PIPELINES

(Late Wednesday) Press Release - CME Group and Cheniere Energy reached an agreement through which CME Group will develop an LNG futures contract with physical delivery to Cheniere's Sabine Pass terminal on the U.S. Gulf Coast.

(Late Wednesday) Press Release - Keyera announced a cash dividend for July 2018 of 14.00 cents per common share. The dividend will be payable on August 15, 2018, to shareholders of record on July 23, 2018. The ex-dividend date is July 20, 2018.

Suntrust Robinsons started Targa Resources at ‘Hold’.

MARKET COMMENTARY

Wall Street futures rose, a day after the U.S. threatened to impose additional tariffs on Chinese imports, tracking global shares. European shares rose, buoyed by strength in media stocks following a new bid from Comcast for Sky. The dollar broadly rose after U.S. producer prices posted their biggest annual gain in over 6 years, while gold prices held steady amid trade tensions.

NASDAQ ENERGY TEAM IN THE NEWS

7/5/2018 - Tamar Essner, energy analyst at Nasdaq Inc., discusses President Donald Trump's efforts to pressure OPEC to increase oil production with Bloomberg's David Westin and Julia Chatterley on "Bloomberg Daybreak: Americas."  Watch the interview here:

Saudis the 'Central Bank' of Oil, Nasdaq's Essner Says


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
This communication and the content found by following any link herein are being provided to you by Corporate Solutions, a business of Nasdaq, Inc. and certain of its subsidiaries (collectively, “Nasdaq”), for informational purposes only. Nasdaq makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Sources include Reuters, TR IBES, WSJ, The Financial Times and proprietary Nasdaq research.

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