Crude climbs as supply constraints outweigh recession fears


The energy sector is poised to start higher, supported by strength in underlying commodities and major equity indices.

WTI and Brent crude oil are up in early trading after two straight days of losses as investors focus again on supply constraints, outweighing fears of a global recession. The market is also watching for possible oil disruptions at the Caspian Pipeline Consortium (CPC), which had been ordered by a Russian court to suspend operations. However, recent reports suggest oil is still flowing. In order to pressure Tehran to revive the 2015 Iran nuclear deal, Washington has tightened sanctions against Iran.

Natural gas futures rose this morning on forecasts of warmer weather and increased demand as excessive heat continues in several key consuming regions.

BY SECTOR:

INTEGRATED IN THE UNITED STATES

A senior Russian lawmaker has said Moscow will take control of the Sakhalin-1 oil and gas project in which ExxonMobilthe Japanese SODECO and the Indian ONGC Videsh are partners, a week after taking over neighboring Sakhalin-2.

Oil production from Russia’s Sakhalin 1 project, which ExxonMobil left in March over Ukraine, fell to just 10,000 barrels per day (bpd) from 220,000 bpd, TASS news agency quoted a Russian official as saying.

Exxon Mobil said it delivered the first shipment of sustainable aviation fuel (SAF) to Changi Airport, part of a year-long pilot program to test the new fuel for aircraft.

INTERNATIONAL INTEGRATED

Equine announced that its second quarter results would be positively impacted by between $400 million and $550 million from trading in natural gas derivatives used to hedge its physical deliveries.

Repsol and Suma Capital has launched a new venture capital fund to invest in clean technologies. The fund will have a capital of up to 150 million euros.

Shell said growing demand for petroleum products that nearly tripled refining profits in the second quarter would boost profits by up to $1.2 billion. In an update ahead of second-quarter results on July 28, Shell also said it would reverse up to $4.5 billion in writedowns on oil and gas assets after it raised its oil price outlook. energy following Russia’s invasion of Ukraine. Oil and refined products trading profits are expected to be strong in the quarter, but lower than in the first quarter of 2022, Shell said. Shell’s indicative refining margin increased in the second quarter to $28.04 a barrel from $10.23 in the first quarter and $4.17 a year earlier, driven by a post-pandemic demand recovery, increased capacity limited global refining and a drop in fuel exports from Russia to Western economies. The higher refining margin is expected to boost the division’s profit by $800 million to $1.2 billion in the second quarter from the first quarter.

Gasunie said it has contracted 7 billion cubic meters (bcm) of liquefied natural gas (LNG) per year to be delivered to its new terminal in the north of the Netherlands. The Czech energy company CEZ as and Shell Western LNG has jointly undertaken to supply LNG to the terminal, which has a capacity of 8 Gm3 and which Gasunie decided to install at the start of the year to help limit the country’s dependence on Russian gas.

Following a call for tenders, SPIE Oil & Gas Services, an international subsidiary of SPIE, won a 5-year contract with TotalEnergies EP Angola for the provision of general maintenance services on the Dalia and Girassol FPSOs in block 17, in deep waters of Angola.

CANADIAN INTEGRATED

No significant news.

E&PS United States

Crescent Point Energy announced an increase in its quarterly dividend, an updated capital repayment framework, the disposal of non-core assets, updated guidance for 2022 and the publication of its annual sustainability report. It met its short-term net debt target ahead of schedule, benefiting from $300 million in proceeds from asset disposals. It also increases the quarterly base dividend by more than 20% to $0.08 per share, representing an annualized dividend of $0.32 per share. It has executed $150 million in planned share buybacks, representing 17.5 million shares, since December 2021. The updated framework targets the return of up to 50% of discretionary excess cash flow, in addition basic dividends. The company expects to return more than $430 million to shareholders in the second half of 2022 based on a WTI of US$100/bbl.

CANADIAN E&PS

No significant news.

OIL SERVICES

GE has announced that its Gas Power business intends to acquire Nexus Controls, a hugue baker company, specializing in aftermarket control system upgrades and field control services to create a single, world-class full-service controls business within GE. After the deal closes, the proposed integrated business would develop the future of GE’s proprietary Mark Vle control systems platform for customers, design retrofit and modernization offerings, and streamline and improve delivery. and the control service in the electricity production area. Financial terms of the acquisition are not disclosed.

Granite announced that it has been awarded the approximately $55 million Knik-Goose Bay Highway Phase 1 reconstruction project near Wasilla, Alaska. The contract was awarded by the Central Region of the Alaska Department of Transportation and Public Facilities (DOT&PF) and will be funded by the federal government. The project will reduce congestion and increase safety along the corridor. The price is expected to be included in Granite’s second quarter CAP.

According to the SEC filing, International oil states tendered for resale of up to 1.9 million common shares by selling securityholders.

DRILLERS

No significant news.

REFINERS

No significant news.

MLPS & PIPELINES

No significant news.

MARKET COMMENTARY

U.S. stock index futures stabilized as investors digested new clues about the Federal Reserve’s approach to rate policy and its fight against inflation detailed in the meeting minutes of June. European stocks were boosted by economically sensitive stocks and chipmakers, as investors awaited European Central Bank meeting minutes for hints on rate hikes. In Asian markets, the Japanese Nikkei ended higher as investors continued to seek battered tech stocks, while Chinese stocks ended in the green, led by automakers jumping on new measures put in place to boost car sales. Gold rose slightly as the dollar eased. Oil prices rose as attention returned to the energy supply crisis.


The Nasdaq Advisory Services Energy Team is part of the Nasdaq Advisory Services, the most experienced team in the industry. The team provides unparalleled shareholder analysis, a comprehensive view of trading and investor activity, and insights on how best to manage investor relations outreach efforts. If you have any questions, please contact Tamar Essner.


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