Oil prices rise to 2014 high on tight supply and tensions between Russia and Ukraine

JThe energy sector is poised to start higher, supported by strength in underlying commodities and broader equity futures which rose this morning after a rocky start to the week amid strong earnings , as investors turned their attention to the results of today’s Federal Reserve policy meeting. Fed funds futures traders expect a 25 basis point hike in March, plus three more rate hikes by the end of the year.

WTI and Brent crude oil futures are up in early trading to levels not seen since October 2014, supported by tight supply and geopolitical tensions in Europe and the Middle East that raise fears of further disruption . Ahead of the official EIA report later today, traders are also digesting last night’s API report which showed the crude stock fell slightly more than expected last week. Western leaders have stepped up military preparations and drawn up plans to protect Europe from a possible supply shock, with US President Joe Biden saying he would consider personal sanctions against Vladimir Putin if Russia invades Ukraine. .

Natural gas futures rallied this morning and are up more than 7.5%, supported by expectations of increased demand for cooling and heating through late January and early February. Traders said demand for U.S. LNG will remain strong as long as global gas prices continue to trade well above U.S. futures, as utilities around the world scramble for LNG cargoes to replenish low inventories in Europe and meet growing demand in Asia.

BY SECTOR:

INTEGRATED IN THE UNITED STATES

Ondas Holdings announced that American Robotics has received a new purchase order from Chevron for its fully autonomous, FAA-approved Scout systems.

The US Department of Energy said it had approved a swap of 13.4 million barrels of crude oil from the Strategic Petroleum Reserve to seven companies as part of President Joe Biden’s effort to help control prices petrol. The companies are: ShellTrading in the United States, 4.2 million barrels; Trafigura Trading LLC, a unit of Farringford NV, 3 million barrels; Phillips 66, 2.3 million barrels; Macquarie Commodities Trading, 2 million barrels; Chevron United States, 885,000 barrels; Exxon Mobil, 515,000 barrels; and BP North American products, 500,000 barrels.

According to Reuters, Exxon Mobil plans to start production from its second oil rig in French Guiana next month.

INTERNATIONAL INTEGRATED

A new step has been taken in the partnership between Eni and Aeroporti di Roma, as part of their strategic agreement to promote decarbonization initiatives in the aviation sector and accelerate the green transition of airports. A shipment of 5,000 liters of pure HVO hydrogenated biofuel arrived at Fiumicino airport from Eni’s Venice biorefinery in Porto Marghera.

BofA Global Research downgraded Equine to Neutral to Buy.

The Petroleum Safety Authority Norway has given AS/Norske Hull consent to use the Transocean Barents mobile drilling rig for production drilling at Ormen Lange.

The Petroleum Safety Authority Norway has given Norske shell agreement for exploration drilling in Block 6305/5 in the Norwegian Sea.

Thailand’s state oil and gas explorer looks set to take control of Myanmar’s biggest gas field, as TotalEnergies and Chevron exit following last year’s coup in the Southeast Asian state, analysts say.

CANADIAN INTEGRATED

No significant news.

E&PS United States

Hesse reported net income of $265 million, or $0.85 per share, in the fourth quarter of 2021, compared to a net loss of $97 million, or $0.32 per share, in the fourth quarter of 2020. On an adjusted basis, the Company reported a year-ago quarter net loss of $176 million, or $0.58 per share. The improvement in adjusted after-tax results compared to the prior year period is primarily due to higher realized sales prices in the fourth quarter of 2021.

CANADIAN E&PS

No significant news.

OIL SERVICES

PRC announced its unaudited results for the fourth quarter ended December 31, 2021. For the quarter ended December 31, 2021, RPC generated revenue of $268.3 million, an increase of 80.5% over 148 $.6 million in the fourth quarter of 2020 due to increased customer activity levels resulting in increased utilization of our existing equipment and price improvements. Net income for the fourth quarter of 2021 was $12.3 million, or $0.06 diluted earnings per share, compared to a net loss of $10.2 million, or $0.05 loss per share in the fourth quarter of the previous year. Adjusted net loss in the fourth quarter of 2020 was $6.8 million, or an adjusted loss of $0.03 per share.

Select Energy Services and Nuverra Environmental Solutions announced that following the Securities and Exchange Commission’s declaration that the registration statement on Form S-4 became effective on January 19, 2022, the two principal shareholders of Nuverra have given their written consent to approve and adopt the merger agreement between Nuverra, Select and wholly owned subsidiaries of Select. These shareholders, Ascribe II Investments, LLC, Ascribe III Investments, LLC and Gates Capital Management, own approximately 84% of the outstanding common shares of Nuverra. Although the consents of Ascribe and Gates are sufficient to approve the transaction, Nuverra requires all of its common stockholders to approve the merger and the other proposals described in the registration statement by executing and returning the written consent provided with the folder. Select and Nuverra expect the transaction to close in the first quarter of 2022, subject to the satisfaction of customary closing conditions.

smart sand announced that it has begun operations and is delivering sand to its new transshipment terminal that can accommodate unit trains in Waynesburg, Pennsylvania. The terminal has over four miles of track, is located on Norfolk Southern’s Class 1 rail line, serves the southwestern part of Marcellus Basin and is expected to have a transshipment capacity of over one million tonnes of sand of fracturing per year. The terminal will also serve as the company’s new northeast hub for its SmartSystem last-mile storage and transshipment solutions.

DRILLERS

No significant news.

REFINERS

No significant news.

MLPS & PIPELINES

Energy Cheniere announced that its Board of Directors has declared a quarterly cash dividend of $0.33 per common share payable February 28, 2022 to shareholders of record at the close of business February 7, 2022.

Lehigh Cement, a division of Lehigh Hanson Materials Limited and Enbridgeannounced a memorandum of understanding to collaborate on a carbon solution for Lehigh’s cement manufacturing plant in Edmonton, Alberta.

LP Energy Transfer announced a quarterly cash distribution of $0.175 per Energy Transfer common unit ($0.70 on an annualized basis) for the fourth quarter ended December 31, 2021, to be paid on February 18, 2022 to unitholders of record at close of business on February 8, 2022. The distribution represents an increase of approximately 15% over the prior quarter and represents the first step in Energy Transfer’s plan to return additional value to unitholders while maintaining its target leverage ratio of 4.0x-4.5x debt to EBITDA. Future distribution level increases will be assessed quarterly with the ultimate goal of returning distributions to the previous level of $0.305 per quarter, or $1.22 on an annual basis, while balancing the leverage objective of the partnership, the opportunities growth and unit buybacks.

Partners Magellan Midstream, LP announced that Michael Mears will retire on April 30. Mears has served as President, CEO and Chairman of the Board of Magellan since 2011. Aaron Milford, 48, will succeed Mears as President and CEO and will become a member of the Board of Directors effective 1st may. Currently, Milford is the COO of the partnership. At the same time, Barry Pearl, who is now Lead Director, will become Chairman of the Board, separating the roles of Chairman and Chief Executive Officer in accordance with best governance practices.

TC Energy is pivoting to find new ways to use its North American crude oil pipeline network after scrapping plans to build the cross-border Keystone XL pipeline, including new ways to use its Cushing’s MarketLink system, Oklahoma, to the US Gulf Coast.

MARKET COMMENTARY

U.S. stock index futures rose, with Microsoft’s Nasdaq 100 futures rising, as investors awaited the Federal Reserve’s monetary policy decision later in the day. European stocks extended their gains and were on course for their best session since early December. The Japanese Nikkei finished in the red, dragged down by the tech heavyweights. The dollar index was higher, while gold prices fell. Oil was up, supported by tight supply and geopolitical tensions in Europe and the Middle East. Tesla and Intel are among the top companies to report earnings after the closing bell.


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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Felix J. Dixon