Oil prices fall after China reports cutbacks in imports


SECTOR COMMENTARY:

Energy stocks are expected to rise in the penultimate trading day of 2021, following broader index futures. News feed and participation remain low.

Oil prices eased on Thursday after the world’s largest importer, China, reduced the first batch of crude import allowances for 2022, offsetting the impact of U.S. data showing fuel demand had slipped. maintained despite the surge in Omicron coronavirus infections. Oil prices reduced their earlier gains after China, the world’s largest importer of crude, slashed the first batch of 2022 import quotas to mostly independent refiners by 11%. “Market sentiment has weakened over fears that the Chinese government will take tougher measures against teapots,” said a Singapore-based analyst, referring to independent refiners.

Natural gas futures are stable in light trading.

BY SECTOR:

INTEGRATED IN THE UNITED STATES

No significant news.

INTEGRATED INTERNATIONAL

PAProduction from its projects in Azerbaijan amounted to 20.6 million tonnes in the first 11 months of the year, the Azerbaijani energy ministry said Thursday. Reuters reported. The country’s total oil production stood at 31.6 million tonnes for January-November, the ministry said in a statement.

Petrobras on Thursday warned that court orders blocking its natural gas price increases undermine “legal certainty” and threaten government efforts to open up the domestic market and attract private investment, Reuters reported. Petroleo Brasileiro SA PETR4.SA, as the company is officially known, said in a securities filing that it has been officially informed of the preliminary orders issued by a court in Rio de Janeiro blocking its price increases for customers of the State. The injunctions of the Rio court affect the contracts between Petrobras and the public gas distributors CEG and CEG RIO.

Saudi Arabia Oil Company and Advanced Electronics Company, a SAMI company, are working together to promote the localization of digital businesses in Saudi Arabia. The two companies signed a Memorandum of Understanding (MoU) to accelerate the development of the Kingdom’s digital ecosystem. The partnership aims to support broader efforts to enable Internet of Things (IoT), computing and communications, robotics, drones and semiconductors technologies that complement the expanding digital ecosystem. as a whole in the Kingdom.

A spokesperson for ShellNigerian company SPDC said Thursday: “The Shell Petroleum Development Company of Nigeria Limited, operator of the SPDC joint venture, has announced the resumption of crude exports at the Forcados oil terminal as of Wednesday, December 29, 2021. A case of remaining force majeure will be provided in due course. “

CANADIAN INTEGRATED

No significant news.

American E&PS

According to SEC filing, December 24, 2021, Earth Stone Energy, Earthstone Energy Holdings, LLC, a subsidiary of Earthstone, Wells Fargo Bank, National Association as administrative agent, the lenders and guarantors parties entered into an amendment to the Credit Agreement dated November 21, 2019, by and between EEH, as borrower, Earthstone, as parent company, Wells Fargo as administrative agent and issuing bank, Royal Bank of Canada, as syndication agent, Truist Bank, Citizens Bank, NA, KeyBank National Association, US Bank National Association, Fifth Third Bank, PNC Bank, National Association, and Bank of America, NA, as documentation agents, and lenders party thereto. Among other things, the Amendment increases the borrowing base from $ 650 million to $ 825 million, unless Earthstone finalizes a note offer before closing; provides mechanisms for transitioning the use of LIBOR to a benchmark replacement rate upon the occurrence of certain transition or choice events made by the borrower and the administrative agent; adds some coverage requirements; adjusts certain financial covenants; redefines the limitations of certain restricted payments that the Borrower may make; and makes certain administrative changes to the credit agreement.

South West Energy announced the extension of its previously announced cash take-over bids to purchase cash up to $ 300,000,000 in aggregate principal of its 4.95% Senior Notes due 2025 and Senior Notes at 7.75% maturing in 2027, subject to the terms and conditions described in the Company’s offer to purchase dated November 23, 2021. The extended expiry date for the take-over offers is December 30, 2021 at 5:00 p.m. 00 New York time.

CANADIAN E&PS

No significant news.

OIL FIELDS SERVICES

No significant news.

DRILLERS

No significant news.

REFINERS

Valero Energy Corporation announced the completion of previously announced debt reduction and refinancing transactions which together reduced Valero’s long-term debt by approximately $ 700 million. Debt reduction and refinancing operations included the issuance of an aggregate principal amount of $ 500 million of 2.800% senior notes due 2031 and $ 950 million total principal of senior notes at 3.650% due in 2051 and the use of the proceeds of the note issuance and cash on hand to redeem and repay approximately $ 2.1 billion in aggregate principal amount of various series of Valero Senior Notes and repay all outstanding Senior 2.700% Valero Notes due 2023.

MLPS & PIPELINES

No significant news.

MARKET COMMENTARY

U.S. stock index futures edged higher on Thursday, as concerns over the Omicron variant eased put the S&P 500 and Dow Jones on track to extend the records.


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Steve R. Hansen