Energy stocks are set to take a breather this morning, weighed down by weakness in the crude complex and U.S. stock index futures which retreated as delays over a new fiscal stimulus package and surging coronavirus infections dented sentiment even as regulators moved toward emergency use authorization of a COVID-19 vaccine.
Oil prices on both sides of the Atlantic are slightly lower but still on track for their 6th consecutive weekly gain. Overnight strength was aided by the FDA advisory panel approval of Pfizer’s COVID-19 vaccine for emergency use authorization. “The vaccine optimism … seems to continue unscathed due to the back-to-back approvals vaccines are getting and the quicker-than-previously-thought rollout of the first campaigns in key markets,” Rystad Energy analyst Paola Rodriguez-Masiu said. Traders will be looking ahead to the Baker Hughes rig count released later today.
Natural gas futures are up 2.5% following yesterday’s gain of 4.5% on a solid weekly storage draw out of the EIA. Preliminary estimates for the next three weekly storage reports indicate draws in-line or slightly better than 5 year averages.
ExxonMobil and PETRONAS have discovered hydrocarbons at the Sloanea-1 exploration well on Block 52 offshore Suriname, adding to ExxonMobil’s extensive finds in the Guyana-Suriname basin. The well was drilled by operator PETRONAS, and the discovery is being evaluated to determine its resource potential.
Brazil’s Senate approved the basic text of a bill to further open up the natural gas market to private competition and break the monopoly held by state-controlled oil company Petroleo Brasileiro SA (Petrobras). The new legal framework changes natural gas distribution from a regime of concessions by the government to one of authorizations by the country’s oil and gas regulator, ANP, thus reducing bureaucracy for building pipelines.
Repsol plans to sell a 25% stake in its client business unit for 2.5 billion euros ($3.04 billion), Spanish newspaper Cinco Dias reported, citing sources in the financial sector. Citi is managing the sale and has already received non-binding offers from pension and infrastructure funds, Cinco Dias said.
Morgan Stanley upgraded Diamondback Energy to ‘Overweight’ from ‘Equal Weight’.
Morgan Stanley upgraded Murphy Oil and Range Resources to ‘Equal Weight’ from ‘Underweight’.
TD Securities downgraded TORC Oil & Gas to ‘Tender’ from ‘Buy’.
Black Hills announced that it has no intent to participate in the CenterPoint Energy sale process for its gas distribution assets in Arkansas and Oklahoma. Black Hills performed a preliminary review of the assets offered for sale and concluded the assets would not be strategic additions.
Zephirin Group upgraded ION Geophysical to ‘Buy Speculative Risk’ from ‘Hold’.
Morgan Stanley upgraded HollyFrontier to ‘Equal-Weight’ from ‘Underweight’.
Morgan Stanley downgraded PBF Energy to ‘Underweight’ from ‘Equal-Weight’.
Morgan Stanley upgraded Valero Energy to ‘Overweight’ from ‘Equal-Weight’.
MLPS & PIPELINES
Inter Pipeline announced a $1 billion capital expenditure program for 2021. Approximately $930 million, or 93 percent, of total capital expenditures will be for organic growth initiatives, with the remainder invested in sustaining capital projects.
Morgan Stanley upgraded Energy Transfer to Overweight from Equal-weight.
Morgan Stanley upgraded Hess Midstream to Overweight from Equal-weight.
Morgan Stanley downgraded Williams Company to Equal-weight from Overweight.
Wall Street futures tumbled, in line with European stocks on worries over the economic impact of a resurgent COVID-19 pandemic, the fate of a Brexit trade deal and the stalled U.S. stimulus measures. Asian equities ended on a mixed note. The dollar edged up on safe-haven bet, whereas gold fell. Oil prices dropped as a jump in U.S. crude stockpiles hurt investor sentiment. Data on U.S. producer prices for November is scheduled for release later in the day.
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