OPEC+ cut to drive oil names, natgas to lag – Citi

By Vlad Schepkov

Citi analysts shared their thoughts on what they called “a surprise preemptive 1.6 mbpd oil output cut” announced by OPEC+ earlier today.

In their latest note on the oil and gas sectors, the analysts said Citi traders expect “oil names to drive performance today with natural gas names potentially lagging following the announcement,” and added they also see “a similar reaction among midstream companies.”

They single out “Targa Resources and Plains All American Pipeline given their crude betas,” as well as “Enterprise Products Partners and Energy Transfer LP Unit,” although believe “liquids-weighted names likely all benefit today.”

Speaking of effects on the natural gas market, the analysts said “the potential for higher associated natural gas production likely puts more pressure on gas-directed basins. Williams Companies, DT Midstream, and Equitrans Midstream could lag today as a result.”