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Oil prices continue to climb as more global supply shortages are expected


EEnergy stocks are expected to open mixed, with E&Ps continuing to be the main beneficiaries of higher oil prices, while integrated stocks and OFS are expected to open more mixed. Oil prices continued their relentless climb this morning amid expectations of further tightening in global supply due to the Ukrainian invasion and the supply chain shortages that still exist. Broader index futures are higher.

Benchmark Brent crude oil prices soared above $113 a barrel on Thursday, with Russian oil exports disrupted as traders try to avoid becoming entangled in sanctions. Brent crude has jumped around 37% in the past 30 days and the six-month contract spread hit a record high on Thursday at over $21 a barrel, indicating very tight supplies. The gains followed a new round of U.S. sanctions targeting Russia’s oil refining sector, raising fears that Russian oil and gas exports could be the next target.

Natural gas futures are about 5 cents lower ahead of weekly inventory data as the weather moderates in the spring shoulder season between peak winter heating and summer cooling. Analyst consensus calls for a drawdown of 141 billion cubic feet.

BY SECTOR:

INTEGRATED IN THE UNITED STATES

No significant news.

INTERNATIONAL INTEGRATED

Eni opened its second wind farm in the Aktobe region, Badamsha 2, with an annual power generation of 200 GWh, the company said.

The Petroleum Safety Authority Norway has given Equine agreement for exploration drilling in production license 1049 in the North Sea.

the Shell Petroleum Development Company of Nigeria Limited and its joint venture partners – Nigerian National Petroleum Corporation Limited, Totalenergies EP Nigeria Limited and Nigerian Agip Oil Company – have signed an agreement for a daily supply of 70 million standard cubic feet of gas to Dangote Fertilizer Company for stimulate production and for local and export purposes.

TotalEnergies announced that it will contribute $50 million to the “Tropical Asia Forest Fund 2” (TAFF2) managed by New Forests, which aims to invest in certified plantations and native forest conservation projects in various countries of Southeast Asia, including Indonesia, Malaysia, Laos, Cambodia, Thailand and Vietnam.

TotalEnergies’ The Normandy platform has successfully started the production of sustainable aviation fuel1 (SAF). This new site complements the biofuel production capacities of the La Mède biorefinery (Bouches-du-Rhône) and the Oudalle plant (Seine-Maritime).

CANADIAN INTEGRATED

No significant news.

E&PS United States

Conoco Phillips announced that it has completed the sale of the subsidiary which indirectly owns its 54% stake in the Indonesian Corridor Block Production Sharing Contract (PSC) and a 35% stake in Transasia Pipeline Company to MedcoEnergi for $1.355 billion, with an effective date of January 1, 2021. After customary closing adjustments, net cash from the sale is approximately $0.8 billion, representing $0.1 billion of restricted cash transferred to MedcoEnergi at closing.

Crescent Point Energy announced its financial results for the year ended December 31, 2021 and increased share buybacks. For the year ended December 31, 2021, adjusted cash flow totaled $1.48 billion, or $2.57 per diluted share, driven by strong net operating income of $42.43 per boe. In the fourth quarter, adjusted cash flow totaled $432.5 million, or $0.74 per diluted share. As previously announced, the Company’s Board of Directors has approved and declared a first quarter 2022 dividend of $0.045 per share, payable April 1, 2022 to shareholders of record March 15, 2022. This equates to an annualized dividend of 0. $18 per share, a 50% increase from the previous level. The board approved the return of additional capital to shareholders in light of the continued strength in commodity prices and Crescent Point’s improved financial condition. The company is increasing its total planned share buybacks to $150 million, which it expects to execute by mid-2022, from the previously announced $100 million. These planned buybacks were initiated in December 2021 with approximately 8.1 million shares repurchased and canceled to date for total consideration of approximately $60 million. Crescent Point has filed a notice with the Toronto Stock Exchange of its intention to renew its normal course issuer bid, which is scheduled to expire on March 8, 2022.

CANADIAN E&PS

Canadian natural resources reported net income of $2,534 million and adjusted net operating income of $2,626 million were achieved in Q4/21, significant increases from net income of $749 million in Q4/20 and adjusted net operating income of $176 million, mainly due to the realized increase in pricing and effective and efficient operations.

Canadian natural resources announced that its board of directors has declared a quarterly cash dividend on its common stock of C$0.75 (seventy-five cents) per common share. The dividend will be payable on April 5, 2022 to shareholders of record at the close of business on March 18, 2022.

OIL SERVICES

Secure energy services released the Company’s financial results for the three months ended December 31, 2021. Revenues (excluding the purchase and resale of oil) of $327 million – a 175% increase over the fourth quarter of 2020 with the midstream infrastructure revenue (excluding oil purchase and resale) increasing by $91 million to $138 million and environmental and fluids management revenue increasing by $117 million to $189 million dollars for the quarter. Net loss attributable to shareholders of $166 million – an increase of $127 million from the fourth quarter of 2020.

DRILLERS

No significant news.

REFINERS

Reuters reported that Valero Energy began restarting the gasoline-producing fluidic catalytic cracker (FCC) on Wednesday at its 335,000 barrel per day (bpd) refinery in Port Arthur, Texas.

MLPS & PIPELINES

No significant news.

MARKET COMMENTARY

U.S. stock index futures fell slightly as soaring oil prices stoked fears of higher inflation, a day after Fed Chairman Jerome Powell signaled the likelihood of a rates rise this month, even as the Russian-Ukrainian crisis deepens. European stocks fell as concerns over the impact of mounting sanctions on Russia weighed on sentiment. Chinese stocks ended lower on slowing growth in services activity, while the Japanese Nikkei closed higher, following a rally on Wall Street overnight. Gold continued to gain on safe haven demand and palladium rose on supply issues. In the currency markets, the euro slipped on concerns over the euro zone’s economic outlook, while the dollar looked well supported after Powell’s comment.


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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