Oil prices fall as Russia offers to stabilize natural gas market

SECTOR COMMENTARY:

Energy stocks are expected to open higher as lower oil and natural gas prices are offset by a sharp rise in broader index futures. S&P 500 futures recently showed open gains of nearly 1%. News feed in the energy sector is weak as earnings season looms large.

Oil prices fell on Thursday, extending losses from the previous session as the United States said it was considering selling oil from its strategic reserves and Russia said it was ready to stabilize the natural gas market. Both contracts fell about 2% on Wednesday. “The crude market could be less tight if the United States drew on strategic crude reserves and if Russia managed to send more natural gas to Europe, it could lead to less substitution of natural gas for crude,” said UBS analyst Giovanni Staunovo. Goldman Sachs said a likely release from SPR, which could reach 60 million barrels, posed only a $ 3 downside risk to its Brent price forecast at $ 90 a barrel at the end of the year.

U.S. natural gas futures fell nearly 3% Thursday to their lowest level in nearly two weeks as world prices fell from record highs and, according to expectations, a federal report will show that last week’s US storage build was larger than usual for a fourth week.

BY SECTOR:

UNITED STATES INTEGRATED

No significant news.

INTEGRATED INTERNATIONAL

PA added to its growing presence in the electricity sector with the acquisition of Blueprint Power, an American distributed technology start-up that aims to transform commercial buildings into “virtual power plants” capable of exchanging green energy and now plans a major expansion under the wing of the supermajor.

Equinor awarded COSL Offshore Management AS a contract for the drilling of four wells on Statfjord Øst with the COSLPromoter platform from spring 2023.

Petrobras has chosen a consortium of PetroRio SA and Cobra, a subsidiary of French company Vinci SA, as the first bidder for its offshore Albacora oil field, said four people familiar with the matter.

Shell released its third quarter 2021 update. Hurricane Ida in the Gulf of Mexico in the United States has impacted the company’s operations and is expected to have an overall negative impact of approximately $ 400 million on adjusted earnings and CFFO in the third quarter of 2021.

CANADIAN INTEGRATED

No significant news.

American E&PS

Comstock Resources announced that it has entered into an asset purchase agreement with Northern Oil & Gas, Inc. to sell its Bakken Shale assets for $ 154 million in cash, subject to customary closing conditions and adjustments. Properties sold include unexploited interests in over 400 producing wells (65.9 net) with recent production of over 4,500 net barrels of oil equivalent per day (approximately 65% ​​oil). The sale is expected to close in the fourth quarter and will take effect October 1, 2021. Comstock expects to recognize a pre-tax loss of $ 130 million to $ 140 million on the disposal. EnergyNet is acting as Comstock’s exclusive advisor on the sale.

Ovintiv announced the achievement of several sustainability milestones related to emissions reductions, social responsibility and corporate governance. Additionally, the company launched a vibrant new sustainability website, highlighting Ovintiv’s data-driven approach to environmental, social and governance (ESG) performance.

PDC Energy announced that the Colorado Oil and Gas Conservation Commission (COGCC) has approved the company’s Spinney Oil & Gas Development Plan (OGDP) permit application. The Spinney, an eight-well rig in rural Weld County, Colo., Marks PDC’s first approved permit under the new rules, which were enacted in January 2021. As of September 30, and including the Spinney OGDP , PDC’s estimated combined approved permits and drilled but incomplete (DUC) wells reflect all planned release activity through 2023.

Stifel took over the cover of Whiting Oil with a maintenance rating.

CANADIAN E&PS

No significant news.

OIL FIELDS SERVICES

NextTier Oilfield Solutions announced the arrival of Michael Sabella as Vice President, Investor Relations and Business Development at NexTier.

JPMorgan upgraded Schlumberger to Neutral Overweight.

United States Silica Holdings announced that it is initiating a review of strategic alternatives for its Industrial and Specialty Products segment. A range of options are under consideration, including a sale or potential separation from the ISP segment.

DRILLERS

Nabors Industries announced that its PACE-R801 – the world’s first fully automated land-based drilling rig – has reached full depth of its first well, a horizontal well for ExxonMobil in the Permian Basin.

REFINERS

No significant news.

MLPS & PIPELINES

Brooge Energy announced that its wholly owned subsidiary, Brooge Petroleum and Gas Investment Company FZE, inaugurated its Phase II storage facility on September 21, 2021. Reflecting the importance of this facility, present at the groundbreaking ceremony was His Highness on Sheikh Hamad bin Mohammed Al Sharqi, ruler of Fujairah and member of the Supreme Council of the United Arab Emirates, and OPEC Secretary General Mohammad Sanusi Barkindo, as well as the executive team of Brooge Energy.

Golar LNG successfully placed $ 300 million of senior unsecured bonds in the Nordic bond market. The bonds will mature in October 2025 and bear interest at 7.00% per annum. The net proceeds of the bond issue will be used to refinance the outstanding convertible bonds of the Company maturing in February 2022 and for general corporate purposes. A request will be made for the bonds to be listed on the Oslo Stock Exchange.

Nikola Corporation, and TC Energy have agreed to collaborate on the co-development, construction, operation and ownership of large-scale hydrogen production facilities (hubs) in the United States and Canada. Nikola’s Energy business unit and TC Energy are actively working together to identify and develop projects to establish the infrastructure required to deliver low-cost, low-carbon hydrogen on a large scale, in line with the core objectives of each. business. In addition, Nikola and TC Energy aim to accelerate the adoption of zero emission fuel cell heavy electric vehicles (FCEVs) and hydrogen in all industrial sectors by establishing hubs in key geographic locations.

MARKET COMMENTARY

U.S. stock index futures rebounded, following European and Asian stocks, after a temporary truce in the deadlock on the debt ceiling in Congress allayed fears of a possible debt default government, while a drop in oil prices allayed fears of higher inflation. Gold prices fell slightly and the dollar remained stable.

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Felix J. Dixon

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