Crude continues to climb on production cut expectations ahead of OPEC+ meeting

The energy sector is poised to start higher, building on yesterday’s rally amid further gains in the crude complex and major equity futures, while the yield of the good 10-year US Treasury bond extended its decline. With little upside sentiment this morning, investors will be looking to post-opening job postings and factory orders data to help gauge the trajectory of monetary tightening.

WTI and Brent crude oil futures add to yesterday morning’s rally on expectations that OPEC+ could accept a sharp cut in crude output at its meeting this week, while the strong demand and the upcoming sanctions on Russian oil also supported prices. OPEC+ is expected to cut output by more than a million bpd at its first in-person meeting since 2020 on Wednesday, OPEC sources say. Voluntary cuts by individual members could add to that, making it their biggest cut since the start of the COVID-19 pandemic, OPEC sources said. Kuwait’s oil minister said the group would make an appropriate decision to secure energy supply and serve the interests of producers and consumers.

Natural gas futures continued to slide for the third consecutive session, under pressure from record production and expectations of milder weather and slowing demand over the next two weeks in due to ongoing storm-related outages and reduced LNG exports.

BY SECTOR:

INTEGRATED IN THE UNITED STATES

No significant news.

INTERNATIONAL INTEGRATED

The construction of the 58 MW Stępień solar power plant in Poland has been completed and the plant is ready for operation. Stępień was developed and will be operated by Wento, equinor 100% subsidiary.

Petrobras informed that it has signed a contract with Sembcorp Marine Rigs & Floaters for the construction of the P-82 platform, following the progress of the development project of the Búzios field, in the pre-salt zone of the basin of Santos.

Shearwater GeoServices Holding AS has announced an award for a large deep-sea Ocean Floor Node (OBN) study on the Petrobras-operated the Grand Iara project, involving the Berbigão, the Sururu and the Atapu shared reservoir, in the Santos Basin off the coast of Brazil.

The oil market does not focus on the fact that the world’s spare capacity to increase oil production is very low, Saudi Aramco The Managing Director said, with shells The CEO said investments won’t change because prices are high.

shells Sabah Shell Petroleum Company Ltd has announced that it has made a final investment decision on phase 4 of the Gumusut-Kakap-Geronggong-Jagus East deepwater offshore development project, together with its co-venturers.

The strikes disrupted TotalEnergies’ refining and delivery of petroleum products for an eighth day, with four of its French factories hit by continued industrial action by workers, a representative of the CGT union told Reuters.

TotalEnergies and Holcim in Belgium have signed a Memorandum of Understanding (MoU) to work together on the full decarbonization of a cement production facility being upgraded by Holcim in Obourg, Belgium. Different energies and technologies will be evaluated for the efficient capture, utilization and sequestration (CCUS) of approximately 1.3 million metric tons of CO2 emitted by the facility each year.

Afreximbank has approved $200 million in funding for a disputed pipeline to export Ugandan crude, and is willing to finance the construction of a refinery in the East African country, the Ugandan presidency has said. TotalEnergiesthe main developer of the pipeline, faces increasing pressure to abandon the project or reroute it due to protests over potential damage to the environment and the livelihoods of local communities.

Medservregis announced that TotalEnergies EP Cyprus BV has extended the current contract with Medserv Cyprus limited, a subsidiary of the company, for the provision of operational base support services in Cyprus for a further period of twelve months until June 2023. The contract extension includes the provision of dedicated facilities and services in the port of Limassol.

CANADIAN INTEGRATED

No significant news.

E&PS United States

Matador Resources announced (1) recent upgrades by Fitch Ratings, Inc. to the company’s credit rating and (2) $105 million of additional purchases of the company’s outstanding senior notes.

Western Midstream Partners, LP has announced that it has signed a letter of intent with a subsidiary of western oilwith the aim of pursuing opportunities for the production and marketing of low-carbon oil and gas products through the development of opportunities for the capture, transport, use and sequestration of carbon dioxide in and around their assets existing in the DJ basins of Texas Delaware and Colorado.

CANADIAN E&PS

Vermilion Energy announced that it has filed an early warning report regarding its holdings in Coelacanth Energy. Vermilion has acquired ownership or control and direction of additional common stock of Coelacanth for an amount equal to more than 2% of the issued and outstanding common stock, thereby triggering the requirement to file a whistleblower report, at the following certain transactions.

OIL SERVICES

Of them Matson Subsidiaries are facing claims from rival container shipping company American President Lines LLC that Matson is abusing its market power over service from the United States to Guam, a federal judge has ruled in an antitrust lawsuit .

DRILLERS

noble issued its mandatory takeover notice to shareholders of The Drilling Company of 1972 A/S (“Maersk Drilling”). Following the compulsory purchase, all remaining shareholders of Maersk Drilling, who did not accept the voluntary public share exchange offer recommended by Noble and did not sell their Maersk Drilling shares on Nasdaq Copenhagen before the delisting becomes effective, will be asked to transfer their Maersk Drilling shares to Noble during the four-week compulsory purchase period beginning today, Tuesday, October 4, 2022 and ending on Wednesday, November 2, 2022 at 11:59 p.m. CET , pursuant to Section 70-72 of the Danish Companies Act.

Valaris announced new contracts and contract extensions, with an associated backlog of $95 million, awarded following the release of the company’s latest contract awards and status update. fleet on September 1, 2022. Backlog excludes lump sum payments such as mobilization costs and capital repayments.

REFINERS

No significant news.

MLPS & PIPELINES

Energy Cheniere announced that its board of directors has appointed Brian E. Edwards as a member of the board, effective October 3, 2022. Mr. Edwards is considered an independent director. Mr. Edwards has been appointed to the Audit and Compensation Committees. Cheniere also announced that David B. Kilpatrick has retired from its Board of Directors, effective October 3, 2022. Mr. Kilpatrick has served on the Board of Directors since 2003 and previously served as Lead Director of the Board of Directors from June 2015 to January 2016.

A gas pipeline operated by Energy transfer and located south of Waverly, Ill., was closed after a fire early Monday, the Jacksonville-Morgan County Emergency Management Agency said in a statement.

First line announced the appointment of Mr. Marios Demetriades as director of the Company.

New Fortress Energy announced that it, together with its joint venture partner Ebrasil Energia Ltda., has completed the sale of the Centrais Elétricas de Sergipe power plant to Brazilian power company Eneva SA. The transaction was originally announced by NFE on June 1, 2022.

According to the SEC filing, Plains All American Pipeline LP filed for a shelf of up to 3.4 million ordinary units by selling unit carriers.

According to the SEC filing, Plains GP Holdings LP filed for shelf up to 1.1 million Class A shares by selling shareholders.

TC Energy will begin pre-construction activities at the Saddlebrook Solar Project located near Aldersyde, Alberta. TC Energy is investing $146 million to build its first solar energy project in Canada. It has the capacity to generate 81 megawatts, enough energy to power 20,000 homes per year. Initial construction includes the installation of solar panels on TC Energy property in the local industrial park.

MARKET COMMENTARY

Wall Street futures were higher as lower U.S. Treasury yields supported demand for equities, as investors await job postings and factory orders data expected later in the year. the day for clues as to how far the Fed will go with interest rate hikes. European stocks rose sharply in a broad-based rally, led by chipmakers, travel and leisure companies. The Japanese Nikkei jumped almost 3% to record its best session in more than six months. A weaker dollar pushed gold prices higher. Oil prices rose ahead of the OPEC+ meeting to discuss supply cuts.


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