Oil Prices Up on Concerns of Tight Supply Ahead of U.S. Driving Season


The energy sector is poised for a higher start, supported by strength in the underlying commodities despite a lower morning for equities. U.S. stock futures are slightly down ahead of minutes from the Federal Reserve’s May meeting which will give investors a better understanding of future rate hikes given the economic circumstances the United States is currently facing.

WTI and Brent crude oil futures are up in early trading on concerns over tight supply and the prospect of rising demand from the upcoming U.S. driving season which is expected to start this Memorial Day weekend. Traders digested API news that showed inventories of refined oil product was down by 4.2 million barrels last week. Analysts are anticipating U.S. crude oil and gasoline inventories to have fallen as well. Oil futures are also being supported as buyers avoid oil from Russia and as the European Union comes closer to agreeing on sanctions that would phase out Russian energy imports. On the demand side, U.S. Memorial Day weekend is expected to be the busiest in two years as Americans are eager to shake off coronavirus restrictions, despite high fuel prices.

Natural gas futures edged up this morning as gas volumes flowing LNG to export plants jumped to the most in seven weeks which offset forecasts for milder weather in key consuming regions. In international news, LNG buyers in Asia and Europe are seeking to lock in supplies via long-term contracts as a buffer against volatile global prices in hopes that it will reverse the last decade’s trend of increasing spot purchases.



Exxon Mobil’s 520,000 barrel-per-day (bpd) Baton Rouge, Louisiana, refinery was restoring normal operations on Tuesday, said company spokesperson Julie King.


Petrofac continues to grow its presence in Africa, with the award of a new contract to provide offshore operations services for bp’s Greater Tortue Ahmeyim (GTA) Project.

On 27 February 2022, Equinor decided to start the process of exiting the company’s Joint Ventures in Russia. Since then, Equinor has halted all new investments into Russia, stopped trading oil and gas products from Russia and announced an impairment of USD 1.08 billion on the balance sheet as of 31 March 2022. Equinor has now transferred its participating interests in four Russian joint ventures to Rosneft and is released from all future commitments and obligations. An agreement to exit the Kharyaga project has also been signed.

Eni, CNH Industrial and Iveco Group have signed a memorandum of understanding for potential joint social development initiatives in countries of common interest in the areas of agriculture, sustainable mobility and education, contributing in their respective industries.

Equinor and Halten East partners Vår Energi, Spirit Energy and Petoro have decided to invest about NOK 9 billion in the development of the area neighbouring to the Åsgard field in the Norwegian Sea. The area consists of six gas and condensate discoveries and option on another three prospects. The partnership submits the plan for development and operation to the Ministry of Petroleum and Energy.

Equinor has made a new oil discovery in Snøfonn Nord, exploration well 7220/8-2 S, by the Johan Castberg field in the Barents Sea. The well was drilled five kilometres south-southeast of discovery well 7220/8-1, which is in the Johan Castberg field, and 210 kilometres northwest of Hammerfest. Equinor is the operator of production licence (PL) 532. Preliminary calculations of the size of the discovery indicate between 37 and 50 million barrels of recoverable oil. Together with the other licensees, Vår Energi and Petoro, Equinor will consider tying the discovery to the Johan Castberg field.

Johnson Matthey and bp have announced that their co-developed, ground-breaking Fischer Tropsch (FT) CANS technology and Johnson Matthey’s innovative reverse water gas shift technology, HyCOgen, have been selected for use by Aramco and Repsol at a new synthetic fuels plant in Bilbao, Spain.

Prosafe has been awarded a contract by Petrobras for the provision of the Safe Eurus semi-submersible vessel for safety and maintenance support offshore Brazil. Similar to the recently announced Safe Notos contract award, the award has a firm period commitment of four (4) years and the commencement is end-March 2023 following on from the expiry of her current contract that commenced in October 2019. The total value of the contract is approximately USD 126 million.

Shell Overseas Investments B.V. and B.V. Dordtsche Petroleum Maatschappij, subsidiaries of Shell, have completed the sale of Shell Neft LLC, Shell’s retail stations and lubricants business in Russia, to PJSC LUKOIL. This follows the receipt of all necessary regulatory approvals.

Shell said planned maintenance at its Mars platform in the Gulf of Mexico was completed on Sunday.

TotalEnergies announced the signature of agreements with Global Infrastructure Partners to acquire 50% of Clearway Energy Group, the 5th US renewable energy player. This constitutes its largest acquisition in the renewable energy in the United States, one of the top 3 renewable markets in the world. With such transaction, TotalEnergies is further accelerating its growth in the renewable energy sector by partnering with GIP, a leading global infrastructure fund.

TotalEnergies Chairman and CEO Patrick Pouyanne said the company was working on other deals similar to its earlier one regarding Clearway Energy.

Environmental activists from Greenpeace France and other organisations launched a protest on Wednesday outside TotalEnergies’ company annual general meeting (AGM), to demonstrate against the company’s environmental policies.

According to Reuters, TotalEnergies Chairman and CEO Patrick Pouyanne said: “majority of our shareholders understand our position regarding Russia”. Pouyanne reaffirmed at TotalEnergies’ annual general meeting that TotalEnergies could exit Russia, if it had to due to the sanctions situation.

The Combined Shareholder’s Meeting of TotalEnergies was held on May 25, 2022, under the chairmanship of Mr. Patrick Pouyanné. The shareholders adopted all the resolutions approved by the Board of Directors, including: Approval of the 2021 financial statements and payment of the €2.64 per share dividend; Renewal of the three-year terms as Director of Ms. Lise Croteau, Ms. Maria Van der Hoeven and Mr. Jean Lemierre; Appointment for a three-year term of Ms. Emma de Jonge as a Director representing employee shareholders. In addition, the Shareholder’s Meeting issued a favorable consultative opinion on the Sustainability & Climate – Progress Report 2022, reporting on the progress made in the implementation of the Corporation’s ambition with respect to sustainable development and energy transition towards carbon neutrality and its related targets by 2030 and complementing this ambition.  Shareholders voted in favor of the consultative resolution proposed by the Board of Directors by a large majority, with 89% of the votes cast, thus reinforcing the 2021 vote but also the strategy proposed by the Board of Directors.


Cenovus Energy announced that on June 28, 2022 it will redeem the entire outstanding principal amount of its 3.55% notes due March 12, 2025.


Barclays upgraded Diamondback Energy to Overweight from Equal Weight.

Barclays downgraded Devon Energy to Equal Weight from Overweight.

Talos Energy said it was interested in scooping up new production, particularly as major oil companies shed assets in a bid to decarbonize.


No significant news.


NOV announced that its Board of Directors declared the regular quarterly cash dividend of $0.05 per share of common stock, payable on June 24, 2022 to each stockholder of record on June 10, 2022.

Smart Sand, Inc. CFO Lee Beckelman discloses sale of 50K share. Beckelman beneficially owns 382K shares of common stock following the transaction.

U.S. Well Services, Inc. announced it has finalized a contract with one of the largest E&P producers in the United States to provide electric pressure pumping services. Under the terms of the agreement, USWS will dedicate a newbuild Nyx Clean Fleet to support the Customer’s development program in Texas for an initial term of 18 months beginning early in Q3 of 2022.


Seadrill provided financial results for the quarter ended March 31, 2022. Operating Revenues were $293 million and adjusted EBITDA was $78 million, representing 26.6% EBITDA margin. 


No significant news.


Cheniere Energy announced that its subsidiary, Cheniere Marketing, LLC, has entered into a liquefied natural gas sale and purchase agreement with POSCO International Corporation, a subsidiary of POSCO Holdings, South Korea’s largest steelmaker and owner of South Korea’s first private LNG terminal.

International Seaways announced that it has closed on a new senior secured credit facility with an aggregate capacity of $750 million, composed of a term loan of $530 million and a revolving credit facility of $220 million, of which $70 million was drawn on May 24, 2022. The Facility matures in May 2027.

JPMorgan upgraded Magellan Midstream Partners LP to Overweight from Neutral.


U.S. stock index futures were largely subdued ahead of the release of minutes from the Federal Reserve’s May meeting. European shares bounced back supported by resource-linked stocks and banks. Japan’s Nikkei closed lower, tracking Wall Street’s overnight declines. The dollar gained as Treasury yields paused recent falls. Gold prices slipped. Oil prices were up, helped by tight supplies and rising demand in the United States.

Nasdaq Advisory Services Energy Team is part of Nasdaq’s Advisory Services – the most experienced team in the industry. The team delivers unmatched shareholder analysis, a comprehensive view of trading and investor activity, and insights into how best to manage investor relations outreach efforts. For questions, please contact Tamar Essner

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

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Source link