Crude drops more than 5% on COVID fears


SECTOR COMMENTARY:

Energy stocks are significantly lower in the pre-market and are expected to see sharp declines to open, under pressure from outsized crude price losses and major index futures that have fallen over fears of a new variant of. Covid found in South Africa. The economically sensitive sectors of the market are expected to experience the most significant sales today. Additionally, with today’s shortened holiday trading session, the lack of liquidity in the market is expected to add to the volatility.

WTI and Brent are down more than 5%, their lowest in more than a month as a new COVID-19 strain has raised fears of slowing demand as supply begins to increase. “This [the sell-off] is attributable to concerns about a large oversupply in early 2022 which is expected to be triggered by the upcoming release of strategic oil reserves in the United States and other major consuming countries, as well as the continued sharp rise in new cases of oil. coronavirus, ”Commerzbank analysts noted. “Additionally, an even more transmissible variant of the virus has been discovered in South Africa, causing a noticeable increase in risk aversion in financial markets today.”

Natural gas futures reversed the trend and rose more than 3% due to cooler weather over the next two weeks in most of the United States, which should boost heating demand .

BY SECTOR:

INTEGRATED IN THE UNITED STATES

No significant news.

INTEGRATED INTERNATIONAL

PA has started production from the Platina oil field off the coast of Angola, chief executive Bernard Looney said in a post on LinkedIn on Thursday, Reuters reported. The Platina field will be connected to BP’s existing floating production, storage and offloading (FPSO) system of the Grand Plutonio in the Angolan Block 18 which started in 2007. It will produce 30,000 barrels of oil per day at its peak. BP said in a statement in October 2020.

Equinor and its partners have submitted a development and exploitation plan (PDO) for the Oseberg field in the northern part of the North Sea to Minister of Oil and Energy Marte Mjøs Persen. Equinor has also revealed its intention to invest NOK 10 billion (over $ 1.1 billion) in this development.

Petrobras approved a revised dividend policy including quarterly payouts and a more flexible payout-linked debt target, Reuters reported. Petroleo Brasileiro SA said in a securities filing on Wednesday that the move came after meeting its 2022 target of reducing gross debt to below $ 60 billion already in the third quarter. The company said it would now adopt “flexibility around this debt target” for its dividend policy, applying gross debt of $ 65 billion to calculate quarterly payments. It also established a minimum annual compensation of $ 4 billion for years in which the average price of Brent crude exceeded $ 40 a barrel, regardless of its level of debt.

Petrobras said on Wednesday it plans to invest $ 68 billion between 2022 and 2026, 84% of which will go to oil and gas exploration and production, Reutersreported. Petroleo Brasileiro SA said in a securities filing that it expects to produce an average of 2.1 million barrels of oil per day in 2022, plus or minus 4%.

Reliance Industries and Saudi Aramco canceled an agreement for the state-owned oil giant to buy a stake in the Indian conglomerate’s oil-to-chemicals business over valuation concerns, Reuters reported. Talks have failed over how much Reliance’s oil-chemicals (O2C) business should assess as the world seeks to move away from fossil fuels and reduce emissions, they said.

NIO announced that it has entered into a strategic cooperation agreement with Shell to collaborate more in the electric vehicle and energy sectors on a global scale. Under the agreement, NIO and Shell will jointly build and operate battery charging and exchange facilities. NIO and Shell plan to install 100 battery exchange stations in China by 2025 and to start building and operating pilot stations in Europe from 2022. Shell’s charging network in Europe will also be upgraded. available to NIO users.

Institutional Shareholder Service (ISS) proxy advisory firm recommended shareholder support Royal Dutch Shell’s plans to move its headquarters from the Netherlands to Britain, according to a document seen by Reuters. Shell announced this month that it will abandon its dual Anglo-Dutch equity structure and move its headquarters to London from The Hague due to the Dutch tax system and following a court ruling on its strategy to reduce carbon emissions. greenhouse gas.

Azur Drones, one of the world leaders in drone-in-a-box solutions for surveillance and inspection, recently obtained the validation of its Skeyetech system by the giant TotalEnergies, confirming its added value for the energy sector. A pioneer of the Smart Industry, TotalEnergies has been interested for several years in innovative “drone-in-a-box” technology, without a remote pilot, operating 24 hours a day, 7 days a week to carry out surveillance, industrial inspection and crisis management. After deploying a first Skeyetech system on the Feyzin site in 2020, Azur Drones signed a framework agreement with TotalEnergies to provide Skeyetech systems on all of its sites, testifying to the renewed confidence of the French group.

CANADIAN INTEGRATED

No significant news.

American E&PS

SM Energy announced that Anita M. Powers has been appointed as a director of the Company. Ms. Powers will serve as an independent director and a member of the Audit Committee and the Compensation Committee of the Board of Directors.

CANADIAN E&PS

No significant news.

OIL FIELDS SERVICES

KBR announced that on November 18, 2021, the company successfully closed the fifth addendum to its credit agreement dated April 25, 2018, as previously amended. Corporate credit ratings and the continued resolution of legacy issues, the amendment significantly improves the flexibility of the business and reduces the cost of servicing its debt.

DRILLERS

Seadrill Limited announced that it had obtained two contracts with Petroleo Brasileiro SA for the West Carina and West Tellus platforms for work on the Búzios field off Brazil. Both contracts were signed for a fixed term of 3 years, with an expected start in September 2022. The total contract value for both contracts is approximately $ 549 million (including mobilization revenue and additional services ).

REFINERS

No significant news.

MLPS & PIPELINES

No significant news.

MARKET COMMENTARY

Wall Street futures and European stocks fell as reports of a newly identified and possibly vaccine-resistant variant of the coronavirus fueled fears of yet another blow to the global economy. Japanese Nikkei and Chinese stocks ended lower. In forex markets, the dollar fell, while the Japanese yen and Swiss franc surged, with investors focusing on safe-haven stocks. Gold prices have gone up. Oil prices plunged more than 5% as a new variant of COVID-19 scared investors and added to fears that an oversupply could swell in the first quarter.


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 insight on how best to manage investor relations outreach efforts. For any questions, please contact Tamar essner.

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

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