Crude slips as market balances threaten Russia’s EU oil embargo over China’s COVID lockdowns


The energy sector is poised to start higher, rebounding as risk appetite showed signs of recovering from yesterday’s sharp drop, but fears over economic growth and complex weakness crude limited sentiment.

WTI and Brent crude oil futures were steady lower in early trading, faltering on the heels of Monday’s more than 6% decline as the market balanced looming European Union sanctions against the Russian oil with demand concerns related to coronavirus lockdowns in China, a strong and growing dollar recession risks. As the dollar hit near 20-year highs, the latest data showed Chinese export growth slowed to single digits, their weakest in nearly two years, as the country extended lockdowns. Financial markets are also heeding fears that some European economies could suffer if Russian oil imports were further curtailed, or if Russia retaliated by cutting off gas supplies, with German officials quietly preparing for any sudden oil shutdowns. Russian gas supply. A shutdown would trigger a deep recession and cost half a million jobs, a senior economist said in a published interview.

Natural gas futures extended yesterday’s selloff, falling a further 7% amid higher production and forecasts of milder than expected weather.

BY SECTOR:

INTEGRATED IN THE UNITED STATES

Aris Water Solutions has announced a long-term full-cycle water management agreement with Herringbone United States in the Permian Basin. Under the agreement, Aris will provide produced water treatment and recycling services to a portion of Chevron’s central position in the Delaware Basin, including areas in Eddy and Lea counties, New Mexico and in Culberson and Reeves counties, Texas.

Leading proxy advisor Institutional Shareholder Services has recommended that investors vote for all director nominees at Exxon Mobil. In a report sent by a representative on Monday evening, ISS also recommended voting “for” the company’s executive compensation, but supported several shareholder resolutions focused on climate concerns. Exxon Mobil’s annual meeting is scheduled for May 25.

Venture Global LNG announced the signing of two new long-term sale and purchase agreements with ExxonMobil LNG Asia Pacific for the sale of 2 million tonnes per year of liquefied natural gas. Under the agreements, the ExxonMobil subsidiary will purchase 1 MTPA from the Plaquemines LNG (Plaquemines) facility as well as 1 MTPA from the CP2 LNG facility. This is the second supply deal for CP2, with construction expected to begin in 2023. Both facilities will replicate the same successful innovative design seen today at Calcasieu Pass, where speed of execution has resulted in the production of the first LNG only 29 months after FID.

INTERNATIONAL INTEGRATED

Equine and Sval Energi reached an agreement for the sale of Equinor’s unoperated share in the Greater Ekofisk region and a minority share in Martin Linge (19%). The deal includes 7.604% of the Ekofisk PL018, PL018B and PL275 area licenses (including the Ekofisk, Eldfisk and Embla fields, and 6.63922% in the Tor unit).

Petrobras said it has entered the engaging phase of the sale of its 25% stake in the Tartaruga oil field, an offshore asset located in the Sergipe-Alagoas basin.

Reuters reported that US government officials had asked Brazil’s state-owned oil company in March Petrobras if he could increase crude production after Russia’s invasion of Ukraine sent world prices skyrocketing.

AP Ventures, Yara Growth Ventures, Shell Companies, Saudi Arabia Energy Ventures and SINTEF Venture place their trust and investment in Hydrogen Mem-Tech (HMT). HMT’s palladium membrane technology separates hydrogen from biogas and natural gas.

CANADIAN INTEGRATED

Suncor Energy adjusted operating income increased to $2.755 billion ($1.92 per common share) in the first quarter of 2022, compared to $746 million ($0.49 per common share) in the prior year quarter , primarily due to significantly higher crude oil and refined products realizations reflecting the improving business environment in the current quarter. Suncor’s net income was $2.949 billion ($2.06 per common share) in the first quarter of 2022, compared to $821 million ($0.54 per common share) in the fiscal quarter previous. Adjusted funds from operations were $4.094 billion ($2.86 per common share) in the first quarter of 2022, compared to $2.110 billion ($1.39 per common share) in the quarter last year.

Suncor energy The Board of Directors approved a quarterly dividend of $0.47 per common share, which represents a 12% increase over the previous quarter’s dividend and the highest quarterly dividend in the company’s history.

Suncor Energy issued a “green light” following a fire at a gasoline manufacturing unit at its 103,000 barrels per day Commerce City refinery in Colorado, according to an alert notification.

E&PS United States

Citi launched a cover on California Resources with a buy rating.

Citi launched a cover on Denbury with a buy rating.

Upgraded Raymond James EOG Resources to the strong purchase of outperformance.

Magnolia oil and gas reported net income attributable to Class A common shares for the first quarter of 2022 of $166.0 million, or $0.90 per diluted share. Total net income for the first quarter of 2022 increased 128% to $208.6 million and the weighted average total number of shares outstanding decreased 9% to 227.4 million compared to the first quarter of 2021.

Ovintiv announced its first-quarter 2022 financial results. The company reported a net loss of $241 million in the first quarter. These results included net risk management losses of $1,458 million, before tax. First quarter cash flow from operating activities was $685 million, non-GAAP cash flow was $1,043 million and capital investments totaled $451 million, which resulted in non-GAAP free cash flow of $592 million.

CANADIAN E&PS

No significant news.

OIL SERVICES

Mineral Compass announced the appointment of Richard P. Dealy to the Company’s Board of Directors. In addition to deep financial expertise, Dealy brings extensive operational and leadership experience to the board.

A recommended senior proxy advisor Halliburton’s shareholders are expected to vote against its executive compensation plan, the oil services provider said in a filing Monday. Institutional Shareholder Services (ISS) criticized members of the company’s compensation committee for failing to address concerns over long-term incentive compensation, according to a regulatory filing.

Global RCN announced its first quarter 2022 results. Net income attributable to common shareholders for the first quarter of 2022 was $10 million, or $0.12 per diluted share, compared to the first quarter of 2021 net loss of ($9) million, or ($0.11) per diluted share. Adjusted net income attributable to common shareholders for the first quarter of 2022 was $15 million, or $0.17 per diluted share, compared to adjusted net loss for the first quarter of 2021 of ($6) million, or ($0.07) per diluted share.

DRILLERS

No significant news.

REFINERS

No significant news.

MLPS & PIPELINES

DHT Holdings announced that in the first quarter of 2022, the Company’s VLCCs reached an average rate of $17,100 per day. Adjusted EBITDA for the first quarter of 2022 was $14.4 million. Net loss for the quarter was $17.3 million, which equates to a loss of $0.10 per basic share. This result includes non-cash fair value gains related to interest rate derivatives of $7.9 million. For the first quarter of 2022, the Company declared a cash dividend of $0.02 per outstanding common share, payable May 26, 2022 to shareholders of record as of May 19, 2022. This is the 49th consecutive quarterly cash dividend . The shares will trade ex-dividend from May 18, 2022.

Tsakos Energy Navigation Ltd. announced that its Board of Directors has declared the regular quarterly cash dividend of $0.546875 per share for its Series D Perpetual Cumulative Preferred Shares and the regular quarterly cash dividend of $0.578125 per share for its Preferred Shares Series E Cumulative Perpetuals.

MARKET COMMENTARY

Major Wall Street index futures and European stocks rose as bargain hunters returned to buy downed stocks after a sharp sell-off. Japan’s Nikkei fell for the second day but avoided bigger losses, while Chinese stocks rebounded on Beijing’s pledges to support the struggling economy. The dollar index rose slightly, after hitting a 20-year high in the previous session. In commodities, oil prices extended losses, hurt by a combination of growing recession fears and COVID-19-related lockdowns in China, while gold prices were little changed. Electronic Arts and Occidental Petroleum are expected to release their quarterly results later today.


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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