March 25, 2021 [Nasdaq]Energy stocks are set to open lower, tracking weaker broader index futures and further declines in oil prices.
News flow is fairly light across the sector, with a handful of analyst conferences taking place today.
Oil prices fell more than 3% on Tuesday, hit by concerns that new pandemic curbs and slow vaccine rollouts in Europe will hold back a recovery in demand, while a stronger dollar also weighed. The market structure was also pointing to weakness, with the front-month Brent spread flipping into a small contango for the first time since January. Contango is where the front-month contracts are cheaper than future months, and could encourage traders to put oil into storage. “Continental Europe is tightening the coronavirus measures and thereby further restricting mobility,” Commerzbank said.
Natural gas futures slipped on Tuesday on forecasts for milder weather and less demand than previously expected over the next two weeks. That decline came despite near record LNG exports. After falling for four weeks in a row, the front-month was now down about 23% since hitting a three-month high of $3.316 during the Texas freeze in mid-February.
US INTEGRATEDS
No significant news.
INTERNATIONAL INTEGRATEDS
According to Reuters, Total and China’s Shenergy Group said they signed binding agreements for the supply by Total of up to 1.4 million tons per year of liquefied natural gas (LNG) and the creation of a joint venture to market LNG in China. The joint venture, controllled for 49% by Total and 51% by Shenergy Group will sell LNG to customers in Shanghai and the neighboring Yangtze River Delta regions, one of the main LNG markets in China, the statement said.
Total, through its affiliate Total Quadran announced the commissioning of the solarization project at L’Oréal’s Vichy production plant. The project consists of photovoltaic parking lot awnings and charge points for electric vehicles. The renewable electricity produced will cover 33% of the plant’s energy needs, from almost 4,000 solar panels across a surface area of 9,500 m² with total power of 1.5 MWp (Megawatts peak).
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
California Resources announced the appointment of Mark A. McFarland as the Company’s permanent President and Chief Executive Officer, effective immediately. Mr. McFarland has served on the Company’s board since its emergence from bankruptcy in October 2020, as its Executive Chairman from November 2020 through December 31, 2020 and as its Chairman of the Board and interim Chief Executive Officer since December 31, 2020.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
Baker Hughes and Horisont Energi AS have signed a memorandum of understanding (MoU) for the Polaris carbon storage project off the northern coast of Norway. Under the agreement, the two companies will explore the development and integration of technologies to minimize the carbon footprint, cost and delivery time of carbon capture, transport and storage (CCTS). This agreement further reinforces Baker Hughes’ and Horisont Energi’s own commitments to decarbonizing the energy industry.
ION Geophysical announced that the Super Major currently deploying the Company’s Gemini™ extended frequency source on a proprietary survey has elected to extend the successful technology deployment. The Company reported the original Middle East deployment in January. The extension will nearly double the duration and area of the original commercial program, validating the technology’s commercial readiness, data quality, and operational and environmental benefits.
ION Geophysical announced that it has commenced its previously announced Rights Offering. The Company is distributing, at no charge, to its holders of common stock, par value $0.01 per share (the “Common Stock”) as of 5:00 p.m. New York City time on March 22, 2021, non-transferable subscription rights to purchase (i) $2.78 principal amount of the 8.00% Senior Secured Second Priority Convertible Notes due 2025 per Right, at a purchase price of 100% of the principal amount thereof or (ii) 1.08 shares of Common Stock per Right, at a purchase price of $2.57 per whole share of Common Stock; provided that any Notes will only be issued in minimum increments of $1,000 and will be rounded down to the nearest whole increment of $1,000 and any shares of Common Stock will only be issued in whole numbers of shares with any fractional shares of Common Stock rounded down to the nearest whole share.
DRILLERS
No significant news.
REFINERS
No significant news.
MLPS & PIPELINES
Western Midstream Partners announced the commencement of an underwritten secondary public offering of 8,000,000 common units representing limited partner interests in WES by an affiliate of Occidental Petroleum Corporation. The Selling Unitholder intends to grant BofA Securities, Inc., as the underwriter, a 30-day option to purchase up to 1,200,000 additional Common Units from the Selling Unitholder. WES is not selling any Common Units in the offering and will not receive any proceeds from the sale of Common Units in the offering. The offering is subject to market and other conditions, and there can be no assurance as to whether or when the offering may be completed.
MARKET COMMENTARY
Wall Street futures slipped while investors awaited testimonies from Fed Chair Jerome Powell and Treasury Secretary Janet Yellen for clues on the pace of economic recovery. European stocks were in the red, as a new wave of coronavirus infection and fresh lockdown in Germany raised fears of a slow economic recovery from the pandemic shock. Japan’s Nikkei fell tracking lacklustre performance in Chinese markets as investors locked in profit on a recent rally in some mainland firms. The dollar firmed, while gold see-sawed in choppy trading. Oil prices fell on demand concerns. New home sales and current account numbers are due on the economic schedule later in the day.
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