Oil Prices Jump To Four-Year High After Saudi Arabia, Russia Rule Out Production Increase
The energy sector is poised for a higher start, backed by strength in the underlying commodities despite a drop in U.S. stock index futures as the latest round of Sino-U.S. tariffs kicked in, with neither showing signs of backing down from a protracted trade war.
Oil prices on both sides of the Atlantic jumped nearly 2% to a four-year high after Saudi Arabia and Russia ruled out any immediate increase in production despite calls by U.S. President Donald Trump for action to raise global supply. “I do not influence prices,” Saudi Energy Minister Khalid al-Falih told reporters as OPEC and non-OPEC energy ministers gathered in Algiers for a meeting that ended with no formal recommendation for any additional supply boost. Trump said last week that OPEC “must get prices down now!”, but Iranian Oil Minister Bijan Zanganeh said on Monday OPEC had not responded positively to Trump’s demands.
Natural gas futures jumped in AM trading, testing the $3.00 level, following reports of high demand this week due to lingering heat in key consuming regions.
INTERNATIONAL INTEGRATEDS
(Saturday) Press Release – PT Pertamina (Persero) and Eni signed a Memorandum of Understanding on integrated cooperation in the downstream sector, namely the potential for environmental-friendly refinery development and trade business opportunities.
(Sunday) Reuters – Royal Dutch Shell wants to reweight its footprint in Nigeria to focus on oil and gas fields far offshore, away from the theft, spills, corruption and unrest that have plagued the West African country’s onshore industry for decades.
(Saturday) Press Release – French battery manufacturer Saft, a unit of Total , has announced the acquisition of the remaining 49 per cent stake in its Indian joint venture Amco at an undisclosed sum. With this, the company plans to establish its Indian subsidiary Saft India and reinforce its partnership with Indian industries.
Reuters – Total said it had made a major gas discovery on the Glendronach prospect, located off the coast of the Shetland islands in the North Sea. Total said that preliminary tests on the new gas discovery confirmed good reservoir quality, permeability and well production deliverability, with recoverable resources estimated at about one trillion cubic feet (1 tcf).
Press Release – Total announced a successful appraisal of the A6 block Shwe Yee Htun-2 discovery, offshore Myanmar, completing a major step towards confirming a commercial project. The well was drilled to a final depth of 4,820 meters and encountered 40 meters of net gas pay in a high quality reservoir. Preliminary tests confirm good reservoir quality, permeability and well production deliverability.
U.S. E&PS
(Saturday) Press Release – Northern Oil and Gas announced that it has priced its previously announced private placement under Rule 144A and Regulation S of the Securities Exchange Act of 1933, as amended, to eligible purchasers of $350 million in aggregate principal amount of additional 8.50% Senior Secured Second Lien Notes due 2023 at an offering price equal to 104% of par.
CANADIAN E&PS
(Saturday) Press Release – Bonavista Energy said that it will pay a quarterly dividend of one cent in cash per common share on October 15, 2018, to common shareholders of record on September 28, 2018. The ex-dividend date is September 27, 2018.
OILFIELD SERVICES
Press Release – KBR announced that its global government services business, KBRwyle, has won a seat on the $28 billion Department of Defense Information Analysis Center Multiple Award Contract (IAC MAC).
(Saturday) Press Release – Secure Energy Services ‘ board of directors has declared a dividend for the month of October, 2018, of 2.25 cents per common share payable on or about October 15, 2018, to shareholders of record on October 1, 2018.
DRILLERS
Press Release – Rowan Companies announced that the Rowan Norway, an N-Class ultra-harsh environment jack-up rig, has been awarded a two-well contract in the Mediterranean Sea by Turkish Petroleum with an estimated duration 100-140 days. The contract is expected to commence in late 2018. The Rowan Norway is currently warm-stacked in the United Kingdom sector of the North Sea.
Credit Suisse upgraded Rowan Companies to ‘Outperform’ from ‘Neutral.’
REFINERS
Reuters – Phillips 66 said distribution pipeline #nc80 released about 10 barrels of crude oil after a broken nipple at kern county, California and Phillips 66 also said the pipeline was shut.
MLPS & PIPELINES
(Saturday) Press Release – Cheniere Energy completed the acquisition of the publicly held shares, representing 17.3% stake, of Cheniere Energy Partners LP Holdings LLC (Cheniere Partners), a company that owns approximately 48.6% limited partner interest in Cheniere Energy Partners LP. The transaction estimated to be valued at approximately US$1,240 million.
Stifel downgraded Crestwood Equity Partners to ‘Hold’ from ‘Buy.’
Press Release – Enable Midstream Partners announced the development of the Gulf Run Pipeline, an interstate natural gas transportation project, by its wholly-owned subsidiary Enable Gulf Run Transmission, LLC. The Gulf Run Pipeline project is designed to connect abundant U.S. natural gas supplies to growing liquefied natural gas export markets on the Gulf Coast. The project is backed by a precedent agreement with a cornerstone shipper for a 20-year, 1.1 billion cubic feet per day of capacity firm transportation service.
Press Release – Pembina Pipeline announced an increase to its 2018 Adjusted EBITDA guidance range to $2.75 to $2.85 billion. The Company also announced that in conjunction with incremental volume commitments from customers on the Peace pipeline, Pembina will be developing additional pipeline and terminalling infrastructure in the Wapiti region near Grande Prairie, Alberta and in northeast B.C. The new infrastructure will have a combined aggregate capital cost of approximately $120 million and will be underpinned by long-term, take-or-pay commitments.
(Late Friday) Reuters – Plains All American will begin operations on an expanded West Texas oil pipeline on November 1, helping to ease a bottleneck that has weighed on Midland crude prices for months, it said in a regulatory filing.
Stifel upgraded Plains All American to ‘Buy’ from ‘Hold.’
Stifel upgraded Plains GP Holdings LP to ‘Buy’ from ‘Hold.’
MARKET COMMENTARY
U.S. stock index futures fell after U.S. and China imposed fresh tariffs and showed no signs of backing down from an increasingly bitter trade dispute. Global equities were trading in the negative. Oil prices rose over 2 percent to a four-year high, as the market responded to OPEC’s refusal to step up its crude production. Dollar slipped ahead of a widely expected interest rate hike by the Federal Reserve this week. Gold prices were up.
Source: www.nasdaq.com
