Crude Climbs Ahead of OPEC+ Meeting, Supply Increase Unlikely

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The vitality sector is about for a decrease begin, pressured by weak point within the broader markets. The main market indices are set to open decrease on rising geopolitical tensions between China and the United States. Investors are involved {that a} deliberate go to by U.S. House of Representatives Speaker Nancy Pelosi to Taiwan might result in a battle.

WTI and Brent crude oil are up in early buying and selling forward of a gathering of OPEC+ producers this week that’s anticipated to result in no additional manufacturing enhance in crude provide. However, considerations over a potential international recession has restricted beneficial properties. OPEC+ is about to satisfy on Wednesday the place a provide increase is unlikely as solely two out of eight members mentioned a modest hike could be mentioned. Saudi King Salman bin Abdulazizis is anticipated to push for a manufacturing enhance on Wednesday as he assured U.S. President Joe Biden on the provision increase after they met on July 16. Despite indicators of an financial slowdown, Hedge Funds and money managers have been heavy consumers of commodity futures final week.

Natural gasoline futures dropped this morning to a two-week low on report output and forecasts for much less demand than beforehand anticipated.

BY SECTOR:

US INTEGRATEDS

No vital information.

INTERNATIONAL INTEGRATEDS

bp’s second quarter revenue soared to $8.45 billion, its highest in 14 years, as robust refining margins and buying and selling prompted it to spice up its dividend and spending on new oil and gasoline manufacturing. bp plans to take care of its general capital expenditure this yr in a spread of $14 billion to $15 billion. bp elevated its dividend by 10% to six.006 cents per share, greater than its earlier steerage of a 4% annual enhance. It halved its dividend to five.25 cents in July 2020 for the primary time in a decade within the wake of the pandemic.

bp introduced that it’s to start a share buyback programme to repurchase strange shares within the capital of the Company. The goal of the Programme is to cut back the issued share capital of the Company in the direction of distributing 60% of surplus money stream generated in 2022 as introduced by the Company on 2 August 2022. The most quantity allotted to the Programme is round $3.5 billion for a interval as much as and together with 31 October 2022.   

bp introduced the appointment to its board of Amanda Blanc as a non-executive director. Amanda Blanc’s appointment will take impact from 1 September 2022.

bp and Eni confirmed that Azule Energy, the brand new 50/50 impartial three way partnership combining the 2 firms’ Angolan companies, has been formally established.

bp is growing its spending on oil and gasoline by $500 million in response to hovering vitality costs and tightening provides, Chief Executive Officer Bernard Looney informed Reuters.

Bloomberg reported that Eni is planning a second liquefied pure gasoline manufacturing vessel offshore Mozambique that may very well be inbuilt lower than 4 years to assist Europe diversify provides of the gasoline, in accordance with an organization govt.

Equinor mentioned it might reverse a choice to decommission its gas-fired Mongstad electrical energy plant because the nation scrambles to protect energy output capability. National electrical energy grid operator Statnett earlier mentioned Equinor ought to postpone the closure, which had been due by the top of August, till additional discover.

Brazilian President Jair Bolsonaro mentioned {that a} current drop in Brent oil costs might lead state-run Petrobras to chop refinery gate gasoline costs as soon as once more, after the corporate introduced two gasolice value reductions in July.

Petrobras mentioned it began the operation that offers Portuguese unit Petrogal Brasil entry to its pure gasoline processing models.

Sapura Energy Berhad introduced that Sapura Navegação Marítima S.A., a subsidiary of Seabras  Sapura Participações S.A, a three way partnership firm of its wholly owned  subsidiary, Sapura Offshore Sdn Bhd and Seabras Serviços De Petroleo S.A has  on 29 July 2022 been awarded with an extension of contract with a worth of  USD130 million roughly RM580 million by Petrobras for the supply of companies and constitution of pipe laying help  vessel “Sapura Esmeralda (PLSV)”.

Aker Solutions mentioned it has gained a contract from Shell to construct an offshore platform for Britain’s Jackdaw gasoline discipline. The offshore discipline about 250 kilometres east of Aberdeen is anticipated to account for over 6% of British North Sea gasoline output at its peak manufacturing in by the center of this decade, Shell has mentioned.

CANADIAN INTEGRATEDS

No vital information.

U.S. E&PS

Benchmark initiated protection on Chesapeake Energy with a Buy score.

Comstock Resources reported monetary and working outcomes for the quarter ended June 30, 2022. Revenues within the second quarter of 2022 totaled $604.0 million (together with realized hedging losses of $257.4 million). Net money offered by working actions (excluding adjustments in working capital) generated within the second quarter was $457.9 million, and web revenue obtainable to frequent stockholders for the second quarter of 2022 was $372.5 million or $1.36 per share. Reported web revenue within the quarter included a pre-tax $184.5 million unrealized acquire on hedging contracts held for danger administration and a $46.8 million loss on early retirement of senior notes within the quarter. Excluding this stuff and sure different gadgets, adjusted web revenue obtainable to frequent stockholders for the second quarter of 2022 was $273.6 million, or $1.00 per diluted share.

Scotiabank downgraded Continental Resources to Sector Perform from Sector Outperform.

Devon Energy reported web earnings of $1.9 billion, or $2.93 per diluted share, within the second quarter of 2022. Adjusting for gadgets analysts sometimes exclude from estimates, the corporate’s core earnings have been $1.7 billion, or $2.59 per diluted share.

Diamondback Energy’s second quarter 2022 web revenue was $1.4 billion, or $7.93 per diluted share. Adjusted web revenue (as outlined and reconciled beneath) was $1.3 billion, or $7.07 per diluted share. Diamondback introduced that the Company’s Board of Directors declared a base money dividend of $0.75 per frequent share for the second quarter of 2022 payable on August 23, 2022, to stockholders of report on the shut of enterprise on August 16, 2022. The Company’s Board of Directors additionally declared a variable money dividend of $2.30 per frequent share for the second quarter of 2022 payable on August 23, 2022, to stockholders of report on the shut of enterprise on August 16, 2022. On July 28, 2022, Diamondback’s Board of Directors accepted growing whole licensed frequent stock repurchases to $4.0 billion.

Murphy Oil introduced the graduation of a collection of tender presents to buy for money sure of its excellent collection of senior notes for an combination buy value, excluding accrued and unpaid curiosity, of as much as $200,000,000.

CANADIAN E&PS

No vital information.

OILFIELD SERVICES

KBR introduced its second quarter 2022 monetary outcomes. Revenue of $1.6 billion grew 5% in comparison with the identical interval in 2021 primarily attributable to elevated exercise in 2022 within the European Command associated to the conflict in Ukraine in addition to the acquisition of Frazer-Nash Consultancy in October 2021, partially offset by exercise in 2021 associated to our exit from Middle East contingency operations. KBR web revenue attributable to KBR, diluted earnings per share, adj. EBITDA and adj. EPS elevated in step with income in addition to the next. Net revenue attributable to KBR was $94 million and $23 million for the three- and six-month durations ended  June 30, 2022, respectively, and diluted earnings per share was $0.61 and $0.17 for the three- and six-month durations ended June 30, 2022, respectively. Adj. EBITDA was $186 million and adj. EBITDA margins have been 12% in Q2 2022.

Matson reported web revenue of $380.7 million, or $9.49 per diluted share, for the quarter ended June 30, 2022.  Net revenue for the quarter ended June 30, 2021 was $162.5 million, or $3.71 per diluted share.  Consolidated income for the second quarter 2022 was $1,261.1 million in contrast with $874.9 million for the second quarter 2021.

Stifel downgraded Matson to Hold from Buy.

NCS Multistage Holdings introduced its outcomes for the quarter ended June 30, 2022. Total revenues have been $27.5 million for the quarter ended June 30, 2022, which was a rise of 28% in comparison with the second quarter of 2021. Net loss was $(5.5) million, or $(2.25) per diluted share, for the quarter ended June 30, 2022. Adjusted web loss for this era was $(4.0) million, or $(1.64) per diluted share, which adjusts for $(0.4) million related to web overseas currency change losses and the write-off of deferred mortgage prices, in addition to the tax results primarily related to adjustments in valuation allowance.

Solaris Oilfield Infrastructure reported web revenue of $8.3 million, or $0.16 per diluted Class A share, for second quarter 2022, in comparison with first quarter 2022 web revenue of $5.7 million, or $0.11 per diluted Class A share. Adjusted professional forma web revenue for second quarter 2022 was $9.4 million, or $0.20 per absolutely diluted share, in comparison with first quarter 2022 adjusted professional forma web revenue of $4.8 million, or $0.11 per absolutely diluted share. Revenues have been $86.7 million for second quarter 2022, which have been up 52% from first quarter 2022, pushed by a rise in methods deployed, contribution from new applied sciences and final mile trucking logistics exercise.

TechnipFMC has been awarded a big contract by ExxonMobil affiliate, Esso Exploration and Production Guyana Limited, for the Gas to Energy Project in Guyana. Subject to ultimate mission sanction, TechnipFMC will present engineering, procurement, building and set up of subsea risers and pipelines. The mission will join the manufacturing from Liza Destiny and Unity again to shore, delivering related gasoline from the sphere to a gas-fired energy plant that can provide electrical energy to the group.

TETRA Technologies introduced second quarter 2022 monetary outcomes. Second quarter 2022 income of $141 million elevated 8% from the primary quarter of 2022 and 38% from the second quarter of 2021.  Net revenue earlier than discontinued operations was $1.8 million, inclusive of $4.9 million of non-recurring expenses and bills.  This compares to web revenue earlier than discontinued operations of $7.7 million within the first quarter of 2022, inclusive of $564,000 of non-recurring credit, web of expenses.  Net revenue per share from persevering with operations was $0.01 within the second quarter in comparison with a web revenue per share from persevering with operations within the first quarter of $0.06.  Adjusted web revenue per share from persevering with operations was $0.05 in comparison with $0.06 within the first quarter of 2022 and to a loss of $0.02 within the second quarter of 2021.

USA Compression Partners, LP introduced its monetary outcomes for the second quarter 2022. Total revenues have been $171.5 million for the second quarter 2022, in comparison with $156.6 million for the second quarter 2021. Net revenue was $9.1 million for the second quarter 2022, in comparison with $2.7 million for the second quarter 2021.

DRILLERS

Noble introduced the appointment of Ian Macpherson as Vice President, Investor Relations efficient August 1, 2022. 

Transocean reported a web loss attributable to controlling curiosity of $68 million, $0.10 per diluted share, for the three months ended June 30, 2022. Contract drilling revenues for the three months ended June 30, 2022, elevated sequentially by $106 million to $692 million, primarily on account of three rigs that returned to work after being idle within the prior quarter, elevated dayrate for 3 rigs, larger income effectivity and one extra calendar day within the second quarter, partially offset by diminished exercise for 2 rigs that have been heat stacked within the second quarter of 2022.

Transocean introduced that the ultra-deepwater drillship, Deepwater Conqueror, has been awarded a two-year contract by a serious operator for work within the U.S. Gulf of Mexico at $440,000 per day with as much as an incremental $39,000 per day for extra services and products. Excluding income related to the extra services and products, the brand new contract provides an estimated $321 million in backlog and is anticipated to start in December 2022 in direct continuation of the rig’s present contract.

Transocean introduced that the ultra-deepwater drillship, Petrobras 10000, obtained a 5.8-year contract for work offshore Brazil with a nationwide oil firm. The contract provides an estimated $915 million in backlog and is anticipated to start in October 2023 and finish in August 2029.

Capital One Securities upgraded Transocean to Overweight from Equalweight.

As per SEC submitting, on July 27, 2022, Transocean, Citibank, N.A., as administrative agent, sure lenders and, for the restricted functions set forth therein, Transocean Ltd. and sure of the Company’s subsidiaries entered into the fifth modification to the Company’s credit score settlement dated June 22, 2018. The Amendment amended the Revolving Credit Facility to, amongst different issues, (i) prolong the maturity date to June 22, 2025 from June 22, 2023 with respect to the 2025 Extended Commitments, topic to (a) permitted extensions thereof in accordance with the phrases of the Revolving Credit Facility and (b) sure early maturity triggers, together with if on any date the mixture quantity of scheduled principal repayments of indebtedness (excluding sure specified indebtedness) due inside 91 days thereof is the same as or in extra of $200 million and obtainable money (professional forma for the reimbursement of such debt) is lower than $250 million, (ii) cut back the borrowing capability from $1.33 billion to $773.5 million till June 22, 2023, and thereafter cut back the borrowing capability to $600 million till June 22,2025, together with a discount within the sublimit for the issuance of letters of credit score from $500 million to $350 million, (iii) change the Company’s capacity to borrow beneath the Revolving Credit Facility on the reserve adjusted London Interbank Offered Rate plus a margin with the flexibility to borrow beneath the Revolving Credit Facility at a ahead trying time period fee primarily based on the secured in a single day financing fee plus the Revolving Credit Facility Margin and a Term SOFR unfold adjustment of 0.10%, (iv) lower the required obtainable money wanted as a situation to borrowing from $500 million to $325 million, (v) require the Company to prepay excellent borrowings beneath the Revolving Credit Facility if its obtainable money exceeds $325 million and (vi) allow the refinancing of sure indebtedness, topic to sure situations, together with limitations referring to liens, ensures and maturity of any such refinanced indebtedness.

Valaris reported second quarter 2022 outcomes. Net revenue was $113 million within the second quarter 2022 in comparison with a web loss of $40 million within the first quarter 2022. Adjusted EBITDA elevated to $29 million within the second quarter from destructive $31 million within the first quarter. Adjusted EBITDAR elevated to $54 million within the second quarter from $31 million within the first quarter. Revenues elevated to $413 million within the second quarter 2022 from $318 million within the first quarter 2022. Excluding reimbursable gadgets, revenues elevated to $385 million within the second quarter from $291 million within the first quarter. The enhance was primarily on account of a $51 million payment associated to the termination of a contract for drillship VALARIS DS-11, in addition to larger utilization and common day charges for each the floater and jackup fleets.

REFINERS

CVR Energy introduced web revenue of $165 million, or $1.64 per diluted share, on web gross sales of $3.1 billion for the second quarter of 2022, in comparison with a web loss of $6 million, or 6 cents per diluted share, on web gross sales of $1.8 billion for the second quarter of 2021. Second quarter 2022 EBITDA was $401 million, in comparison with second quarter 2021 EBITDA of $102 million.

Delek US Holdings introduced that its Board of Directors reinstated the Company’s common quarterly money dividend on its frequent stock of $0.20 per share payable to all shareholders of report of the Company’s frequent stock as of the shut of enterprise on August 22, 2022. The cost date for the dividend shall be September 6, 2022.  The Company additionally introduced that its Board of Directors accepted an roughly $170 million enhance in its share repurchase authorization, bringing the whole quantity obtainable for repurchases beneath present authorizations to $400 million. 

Marathon Petroleum reported web revenue attributable to MPC of $5.9 billion, or $10.95 per diluted share, for the second quarter of 2022, in contrast with web revenue attributable to MPC of $8.5 billion, or $13.00 per diluted share, for the second quarter of 2021. Adjusted web revenue was $5.7 billion, or $10.61 per diluted share, for the second quarter of 2022. This compares to adjusted web revenue of $437 million, or $0.67 per diluted share, for the second quarter of 2021. Adjusted outcomes for these durations exclude web pre-tax advantages of $238 million and $11.6 billion, for the second-quarter 2022 and second-quarter 2021, respectively.

MLPS & PIPELINES

Equitrans Midstream introduced monetary outcomes for the second quarter 2022. The Company generated $74 million of web revenue and achieved $264 million of adjusted EBITDA. It recorded 71% of whole working income from agency reservation charges.

MPLX LP reported second-quarter 2022 web revenue attributable to MPLX of $875 million, in contrast with $706 million for the second quarter of 2021. Adjusted earnings earlier than curiosity, taxes, depreciation, and amortization (EBITDA) attributable to MPLX was $1,457 million, in contrast with $1,374 million within the second quarter of 2021. The Company additionally introduced an incremental $1 billion unit repurchase authorization.

Williams introduced its unaudited monetary outcomes for the three months ended June 30, 2022. GAAP web revenue was $400 million, or $0.33 per diluted share – up 32% vs. 2Q 2021. Adjusted web revenue was $484 million, or $0.40 per diluted share (Adjusted EPS) – up 48% vs. 2Q 2021. Adjusted EBITDA was $1.496 billion – up $179 million or 14% vs. 2Q 2021.

Evercore downgraded Tellurian Inc to in line from outperform.

MARKET COMMENTARY

Wall Street futures fell over worries {that a} go to by U.S. House of Representatives Speaker Nancy Pelosi to Taiwan would additional hurt relations between China and the United States. In Asian markets, Japan’s Nikkei and China’s shares ended decrease. European shares slipped, following weak international manufacturing facility knowledge which fueled financial considerations. The Japanese yen strengthened in opposition to the greenback. Gold costs have been up. Oil costs dropped over a bleak outlook for gasoline demand. JOLTS job openings knowledge is scheduled for launch later within the day.


Nasdaq Advisory Services Energy Team is an element of Nasdaq’s Advisory Services – essentially the most skilled crew within the business. The crew delivers unmatched shareholder analysis, a complete view of buying and selling and investor exercise, and insights into how greatest to handle investor relations outreach efforts. For questions, please contact Tamar Essner. 


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