drone pilot industryCrude Drops over 5% on COVID Fears

November 26, 2021by helo-10
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SECTOR COMMENTARY:

Energy stocks are sharply lower in the pre-market and are set for steep declines at the open, pressured by outsized losses in crude prices and the major index futures which tumbled on fears of a new Covid variant found in South Africa. Economically sensitive sectors of the market are expected to see the steepest sell-off today. Additionally, with today’s shortened holiday trading session, the lack of liquidity across the market should add to the volatility.

Both WTI and Brent are down more than 5%, their lowest in more than a month as a new COVID-19 strain sparked fears about a demand slowdown just as supply starts to increase. “This [the sell-off] is attributable to concerns about a sizeable oversupply in early 2022 that is set to be brought about by the upcoming release of strategic oil reserves in the US and other major consumer countries, plus the ongoing steep rise in new coronavirus cases,” noted analysts at Commerzbank. “Furthermore, an even more transmissible variant of the virus has been discovered in South Africa, prompting a noticeable increase in risk aversion on the financial markets today.”

Natural gas futures bucked the trend and a higher by more than 3% on cooler weather for the next two weeks in most of the US which should boost heating demand.

BY SECTOR:

US INTEGRATEDS

No significant news.

INTERNATIONAL INTEGRATEDS                                            

BP started production at the Platina oilfield offshore Angola, Chief Executive Bernard Looney said in a post on LinkedIn on Thursday, Reuters reported. The Platina field will be linked to BP’s existing Greater Plutonio floating production, storage and offloading (FPSO) system in Angola’s Block 18 which started up in 2007. It will produce 30,000 barrels of oil per day at its peak, BP said in a statement in October 2020.

Equinor and its partners have submitted a plan for development and operation (PDO) for the Oseberg field in the northern part of the North Sea to the minister of petroleum and energy Marte Mjøs Persen. Equinor also revealed plans for investing NOK 10 billion (over $1.1 billion) in this development. 

Petrobras approved a revised dividend policy including quarterly payouts and a more flexible debt target linked to the payments, Reuters reported. Petroleo Brasileiro SA said in a securities filing late on Wednesday that the move came after it reached its 2022 target of bringing gross debt under $60 billion already in the third quarter. The company said it would now adopt a “flexibility around this debt target” for its dividend policy, applying a gross debt of $65 billion to calculate the quarterly payments. It also established a minimum annual compensation of $4 billion for fiscal years in which the average price of Brent crude exceeded $40 per barrel, regardless of its debt level.

Petrobras said on Wednesday it expects to invest $68 billion between 2022 and 2026, with 84% of that going to oil and gas exploration and production, Reutersreported. Petroleo Brasileiro SA said in a securities filing it expects to produce an average of 2.1 million barrels of oil a day in 2022, plus or minus 4%.

Reliance Industries and Saudi Aramco have called off a deal for the state oil giant to buy a stake in the oil-to-chemicals business of the Indian conglomerate due to valuation concerns, Reuters reported. Talks broke down over how much Reliance’s oil-to-chemicals (O2C) business should be valued as the world seeks to move away from fossil fuels and reduce emissions, they said.

NIO announced to have entered into a strategic cooperation agreement with Shell to further collaborate in the electric vehicle and energy industries globally. According to the agreement, NIO and Shell will jointly construct and operate battery charging and swapping facilities. NIO and Shell plan to install 100 battery swapping stations in China by 2025, and start to construct and operate pilot stations in Europe from 2022. Shell’s charging network in Europe will also become available to NIO users.

Proxy advisory firm Institutional Shareholder Service (ISS) recommended shareholders support Royal Dutch Shell’s plan to move its head office from the Netherlands to Britain, according to a document seen by Reuters. Shell said this month it would scrap its dual Anglo-Dutch share structure and move its head office to London from The Hague due to the Dutch tax system and after a court ruling over its strategy to reduce greenhouse gas emissions.

Azur Drones, one of the world leaders in drone-in-a-box solutions for surveillance and inspection, has recently obtained validation of its Skeyetech system by the giant TotalEnergies, confirming its added value for the energy sector. As a precursor of the Smart Industry, TotalEnergies has been interested for several years in the innovative “drone-in-a-box” technology, without a remote pilot, operating 24/7 to perform surveillance, industrial inspection and crisis management missions. After deploying a first Skeyetech system on the Feyzin site in 2020, Azur Drones has signed a framework agreement with TotalEnergies to make Skeyetech systems available to all its sites, reflecting the renewed trust from the French group.

CANADIAN INTEGRATEDS

No significant news.                       

U.S. E&PS

SM Energy announced that Anita M. Powers has been appointed to serve as a director of the Company. Ms. Powers will serve as an independent director and as a member of the Audit Committee and the Compensation Committee of the Board of Directors.

CANADIAN E&PS

No significant news.

OILFIELD SERVICES

KBR announced that on November 18, 2021, the company successfully closed the fifth amendment to its credit agreement dated April 25, 2018, as previously amended.Following a strategic shift in the company’s business mix, consistent performance against long-term financial targets, improvement in corporate credit ratings, and the continued resolution of legacy matters, the amendment measurably improves the company’s flexibility and reduces its debt service cost. 

DRILLERS

Seadrill Limited announced that it has secured two contracts with Petroleo Brasileiro S.A. for the West Carina and West Tellus rigs for work on the Búzios field offshore Brazil. Both contracts have been signed on a 3-year fixed-term basis, with expected commencement in September 2022. Total contract value for the two contracts is approximately $549m (inclusive of mobilization revenue and additional services).

REFINERS

No significant news.

MLPS & PIPELINES

No significant news.

MARKET COMMENTARY

Wall Street futures and the European shares tumbled as reports of a newly identified and possibly vaccine-resistant coronavirus variant stoked fears of a fresh hit to global economy. Japan’s Nikkei and Chinese stocks ended lower. In currency markets, the dollar fell, whereas the Japanese yen and the Swiss franc surged as investors turned their focus to safe havens. Gold prices gained. Oil prices dived more than 5% as a new COVID-19 variant spooked investors and added to concerns that a supply surplus could swell in the first quarter.


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.



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