WEEKLY PUBLICATIONS
The Oil Sands Weekly
Energy Market Review
US Inventory Report


WEEKLY NEWSLETTER
Sign-up for the latest oil sands news, site updates and what's moving energy markets, delivered to your inbox every week-end:

WE RESPECT YOUR PRIVACY
Opt out anytime by clicking "UNSUBSCRIBE" at the bottom of the newsletter.
The Oil Sands Weekly

The Oil Sands Weekly

CNRL catapults to #1 mine operator in the oil sands . . . 

Canadian Natural Resources (CNRL) and Royal Dutch Shell both sealed the deal this week on CNRL's acquisition of Shell's oil sands and heavy oil assets.

Shell has sold most of their stake in the Athabasca Oil Sands Project (AOSP), reducing its share from 60% to just 10%. AOSP includes the Muskeg River and Jackpine mining operations, as well as the Scotford Upgrader and Quest Carbon Capture and Storage (CSS) Project. Other divested assets include the Peace River property, the Carmon Creek lease and Cliffdale heavy oil field.

As part of the deal, CNRL will take over operation of both Muskeg River and Jackpine, as well as the Peace River thermal in-situ facility. Shell will remain the operator of both the Scotford upgrader and Quest.

CNRL now moves from the fourth largest oil sands mine operator to the top spot. Once the company's Phase 3 expansion is completed at the Horizon Mine next year, CNRL will have a gross bitumen production capacity of about 555,000 bbl/day from its mining operations alone. 

All of the company's mined bitumen will be upgraded into light sweet synthetic crude (or SCO), which sells at prices close to par with West Texas Intermediate (WTI). Total net SCO production will increase from the current 200,000 bbl/day, to 380,000 bbl/day once Scotford is taken into account. After expansions are completed at the Horizon Upgrader later this year, net SCO production will rise to 430,000 bbl/day, making it the second largest SCO producer in the oil sands after Suncor Energy.

When factoring CNRL's conventional, offshore and natural gas production, total production will be well in excess of 1 million boe/day next year.

The CNRL family grows by 2,800 to about 10,000 employees worldwide.

AER gives Suncor a second chance . . .

The Alberta Energy Regulator (AER) has agreed to reconsider Suncor's tailings management plan for its Millennium Mine. The provincial regulator rejected the company's plans to water-cap its fine fluid tailings (FFT) last March, calling the technology "unproven."

Suncor says it was not able to provide more specific details prior to obtaining patent protection for the technology. However, the company will provide the AER with more data on the process.

If left untreated, FFT can take decades (or even centuries) to settle and dewater, preventing the timely reclamation of tailings storage ponds. FFT capture plans must be approved by the AER under the province's Tailings Management Directive 085.

Husky gives West White Rose the green light . . . 

Husky Energy and partners have approved the West White Rose Project offshore Newfoundland and Labrador (NL).

First oil is expected in 2022 eventually reaching a peak capacity of 75,000 bbl/day by 2025 as new wells are brought online. Total capital spend over the life of the facility is estimated at $5.2 billion. 

Construction is slated to commence in Q4/2017. The concrete gravity structure for the platform will be built in Argentia, NL. The structure will then be towed to the White Rose field where the platform’s topsides will be installed and connected to the SeaRose FPSO (floating production and storage offloading). The facility already has all regulatory approvals in place.

Husky is the operator of the project, owning about 70% of the venture. Partners include Suncor Energy (27.5%) and Nalcor Energy (5%).

Husky also says it has discovered more light oil in the Northwest White Rose region, about 11 km northwest of the SeaRose FPSO. The size of the find is still being assessed.

. . . and remains focused on growth

Husky also laid out their 5-year growth plan this week at their annual 2017 Investor Day in Toronto, ON.

The company is targeting an annual production growth rate of 4.8%, increasing output to almost 400,000 boe/day by 2021. Much of that increase will come from the Lloyd and Tucker Thermal Projects, the Sunrise oil sands SAGD facility and offshore gas development in China. Husky expects to produce 320,000 to 335,000 boe/day this year.

The company expects to add another 40,000 bbl/day of new thermal bitumen capacity over the next five years, including 10,000 bbl/day from Rush Lake 2, currently under construction, and three additional 10,000 bbl/day thermal bitumen projects near Lloydminster, Saskatchewan.

Thermal bitumen production at Tucker is now averaging about 23,000 bbl/day, ramping up towards 30,000 bbl/day in 2018. Gross bitumen production at Sunrise is currently about 40,000 bbl/day. 14 new well pairs are being tied-in and should begin producing oil by the end of 2017. Sunrise is a 50/50 joint venture with BP.

Upstream operating costs are expected to fall from about $14.25/bbl this year to less than $12 by 2021. About 70% of the company's Western Canada production is gas-weighted, providing a hedge against rising gas prices.

In order to improve integration between upstream and downstream operations, Husky is also investing heavily on increasing margins and operating flexibility at its Lloydminster, Lima and Toledo refineries.

Capital spending guidance for the year has been reduced by $100 million to about $2.5-2.6 billion. The company is banking on an average WTI price of US$50 this year, rising to US$60 by 2019.

The path to getting more ZEVs on the road. . . 

The federal government is trying to figure out how to get Canadians to drive more zero-emission vehicles (ZEVs). The government says the transportation sector accounts for 24% of the country's emissions and ZEVs are the answer to meeting its 2030 GHG reduction targets.

The feds have set up an Advisory Group which includes government representatives, the auto industry, consumer groups, NGOs and academics.

The government stopped short of setting a specific target for the number of ZEVs that need to be on the road. However, the Trudeau Liberals have pledged over $180 million to build electric charging stations throughout the country.

Quebec and several US states have adopted California-style firm targets on the number of ZEVs each auto companies needs to sell. Auto manufacturers, particularly the big three (GM, Ford, Fiat-Chrysler) say there's no demand for electric vehicles, forcing them to lower prices below the cost of production. GM claims to lose US$10,000 for each ZEV sold, while Fiat claims losses are closer to US$14,000. Even premium dealers like Telsa lose on average US$13,000 for every electric car sold.

About 60% of US auto sales are pickups, SUVs, crossovers and minivans, which rarely have a fully electric model. Electric vehicles presently account for about 1% of the world's fleet.

BC's opposition parties unite for one common goal . . . 

The BC Green Party signed an agreement with the NDP to form a "stable minority government" this week. The combined Greens and NDP hold 44 seats in the BC legislature, one more than the ruling Liberals. It is unclear what the agreement actually entails but members of both oppostion parties have agreed to vote together on all proposals. 

Fiscally, the Greens have more in common with the Liberals than the NDP. However, the Greens and NDP are united in their opposition to the TransMountain expansion vowing to "immediately employ every tool available" to stop the project.

Another project in the cross-hairs is BC Hydro's $8.8 billion Site C hydroelectric dam, required to power future LNG development. The Greens are opposed to Site C and LNG in general while the NDP have waffled on the topic, vowing instead to send the project through an environmental assessment process. Site C is located in Fort St. John and has the potential to deliver "carbon neutral" power to Alberta's oil sands. The project is already under construction, employing about 2,000 workers.

BC's electoral map is sharply divided across geographic boundaries. The NDP won sparsely-populated coastal communities (except the Kitimat area) and several heavily-populated neighbourhoods in Metro Vancouver while the Liberals have a stronghold in BC's interior. The NDP would like to redraw the electoral map, giving the heavily-populated Metro Vancouver area more seats.

Alberta Premier Rachel Notley issued a statement that read "It’s important to note that provinces do not have the right to unilaterally stop projects such as Trans Mountain that have earned the federal government’s approval. This is a foundational principle that binds our country together. There are no legal tools available to provinces to stand in the way of infrastructure projects that benefit all Canadians." The BC Greens adamantly disagree and have accused Alberta of being stuck in the 20th century.

Prime Minister Justin Trudeau also weighed in noting that the pipeline's approval was "based on facts and evidence on what is in the best interests of Canadians ... Regardless of the change in government in British Columbia or anywhere, the facts and evidence do not change."

Pipelines and ports fall under federal jurisdiction, but it is up to the province to grant construction permits.

PCs elect a "true conservative" . . . 

Andrew Scheer narrowly beat out Maxime Bernier for leadership of the federal Conservative Party. 

Scheer is far right conservative but has promised to adopt more centrist leader, reminiscent of Stephen Harper. Scheer has promised to balance the budget within 2 years of taking office, which would require about $30 billion worth of tax cuts annually. The new leader also wants to repeal the carbon tax and place flags at every gas pump showing consumers which country their oil comes from.

Scheer served as Speaker of the House during Harper's second term in office and presently serves as MP for Regina-Qu'Appelle.

This week's other notable Canadian energy news . . . 

Suncor says light oil shipments have resumed from Syncrude, after a fire disabled the upgrader in March. The company says all repairs have been completed and the pipeline has been restarted at an initial rate of 140,000 bbl/day, ramping up to full capacity later this month. Syncrude's Mildred Lake upgrader has the capacity to produce 350,000 bbl/day of light sweet crude. 

Hot on the heals of agreements to supply pipe for 75% of the Trans Mountain expansion, 900 unionized workers at Regina's Evraz steel-mill have voted 99.3% in favour of strike action. The union accuses the "Russian-owned, American-managed" company of "trying to squeeze out even more money by attacking the long-standing benefits of workers." The workers have been without a contract since July 2016. Management's latest deal includes no pay increase for the next three years, followed by a 0.5% increase for year 4 and 5.

Houston-based Apache Corp has agreed to sell its light oil assets in Alberta and Saskatchewan to Cardinal Energy for US$330 million. The properties produce about 5,000 boe/day. Cardinal Energy will fund the acquisition by issuing new shares and debt. It also expects to sell royalty interests in the Apache assets by the end of the year. Cardinal increased its 2017 production guidance to about 19,500 boe/day. Apache says it will use the funds to focus on high-growth areas, such as the Permian shale.

Keyera has sanctioned its Wapiti natural gas gathering & processing complex, located just south of Grande Prairie. The first phase includes a 150 MMcf/day sour gas processing plant, a 25,000 bbl/day condensate processing facility, a gathering pipeline system and various field compressor stations. The project has an estimated capital cost of $470 million and is expected to come online by the middle of 2019. The second phase, if deemed required, will cost an additional $155 million.

Elected for the people of Pittsburg, not Paris . . . 

President Donald Trump pulled out of the Paris Accord this week, calling the deal a redistribution of wealth with negligible environmental benefits. Trump pointed the finger at China and India who are allowed to dramatically increase emissions over the next decade under the Paris deal.

The US will also no longer pay into the Green Climate Fund, which calls for developed countries to send US$100 billion per year to developing countries (including China, India and Africa) to build renewable energy. The previous Administration has promised US$3 billion but only paid US$1 billion into the fund just before President Obama left office in January. 

The UN would like to see funding from developed nations increase to US$450 billion per year post 2020. Trump also lamented there is very little oversight or transparency over how the funds are allocated, calling the program a taxpayer-funded UN "slush fund."

The President says compliance with the Paris Accord would have cost Americans US$3 trillion in lost economic activity and 9 million jobs by 2040.

Trump's figures are in stark contrast to the Canadian government's claims that fighting climate change will create jobs and grow the economy. Prime Minister Trudeau has committed $2.65 billion to the Green Climate Fund on behalf of Canada during his term in office.

The President called America the "cleanest country on Earth" with the world's tightest environmental standards. US carbon emissions have been falling steadily through the past decade due to increased use of natural gas for power and improved fuel efficiency.

Trump also said he was elected to represent the citizens of Pittsburgh, not Paris. The Mayor of Pittsburgh responded that his city plans to follow the guidelines of the Paris Agreement "for our people, our economy and future."

The Paris Accord was signed by former President Obama but never passed through Congress. The agreement is non-binding. However, Trump has left the door open to renegotiating a new deal.

The US and China are the world's largest GHG emitters, representing about 45% of global CO₂ emissions. Ratification of the Paris accord required 55 countries that produce at least 55% of the world's emissions to sign-on before being ratified. It is unclear what happens to the deal now that the US has pulled out.

Putting a cap on global temperatures . . . 

ExxonMobil shareholders voted 62% in favour of disclosing "the impact of compliance with global climate change guidelines," specifically what would happen if emissions are capped in order to keep an average global temperature rise to less than 2°C. 

Exxon maintains it already provides information on the impacts of technology changes and shifts in energy demand. However, CEO Darren Woods says the company will reconsider how it communicates the risks of climate change. 

The shareholder's proposal is non-binding but is back by some of Exxon's top institutional shareholders. Oddly enough, the same group of shareholders voted against additional disclosure of methane emissions, despite being being a far more powerful greenhouse gas.

Starting up new pipelines, in the US . . . 

The Dakota Access Pipeline (DAPL) is officially up and running, according to operator Energy Transfer Partners (ETP). The 30 inch 1,172 mile line transports crude from North Dakota to a storage terminal in Illinois, connecting down to refineries in the Gulf Coast. The pipeline had a planned capacity of 470,000 bbl/day but is running at 520,000 bbl/day due to high demand. ETP says it may expand the system further to 570,000 bbl/day.

Houston-based Targa Resources announced plans to build a NGL pipeline from the Permian Basin to Targa's fractionation and storage hub in Mont Belvieu, Texas. Initial capacity on the US$1.3 billion "Grand Prix" line will be 300,000 bbl/day, expandable to 550,000 bbl/day. The line should be in service by the middle of 2019.

. . . and reversing old pipelines

Buckeye Partners has filed an application with Pennsylvania's Public Utilities Commission to reverse flow in its 350 mile (560 km) Laurel Pipeline, that currently delivers refined products from East Coast refineries to Pittsburg

Reversing the line would instead deliver products from Midwest refineries into the Pittsburg area. East Coast refineries are already at a competitive disadvantage due to higher import prices for crude (typically purchased at prices closer to Brent) and large volumes of refined products imported from overseas. About 25% of gasoline consumed in the northern Atlantic region comes from Europe.

Around the world this week . . . 

Italian energy firm Eni has signed an agreement with the government of Mozambique to develop the South Coral field, estimated to hold 450 billion cubic metres of natural gas. The project includes building six subsea wells connected to a floating LNG platform capable of producing about 3.4 million tonnes/year of LNG. Eni expects the facility to come online by 2022 at an estimated capital cost of US$8-10 billion.

BP announced two "significant gas discoveries" about 80 km offshore Trinidad and Tobago. BP also sanctioned the Angelin gas project, which is expected to produce 600 MMcf/day of gas by 2019. The UK-major estimates the region contains about 2 trillion cubic feet of natural gas, potentially making it a major gas supplier in the Atlantic.

Still in Trinidad and Tobago, Royal Dutch Shell has agreed to purchase Chevron's assets in the South American country. The deal is reported to be worth about US$250 million.

Rosneft signed an agreement with the Kurdistan Regional Government to explore and develop five oil fields in the autonomous region. Earlier this year, the oil major agreed to pre-finance Kurdish oil exports to help the government patch a hole in its budget. Kurdistan also agreed to give Russia access to its 700,000 bbl/day export oil pipeline, which will be expanded to 1 million bbl/day.

Rosneft also signed a "strategic cooperation" agreement with BP for natural gas supply to Europe. The agreement encompasses exploration, production, supply and development of LNG terminals. Rosneft also extended its agreement with Thailand's PTT Public Company for oil and LNG supply through 2037.

The head of Lukoil, Russia's second largest oil producer, met with ExxonMobil CEO Darren Woods this week to discuss the possibility of future joint ventures. No further details were released on the discussions.

China's Hengyi Group says it expects to complete construction of its US$3.4 billion refinery in Brunei by October. The 160,000 bbl/day refinery is four years behind schedule, blamed on delays in local infrastructure.

In an effort to wean revenues away from oil exports, the Saudi government is introducing a Sin Tax on the sale of tobacco products and caffeinated drinks, and plans to implement a VAT effective January 1, 2018. The UAE government is also bringing in a VAT to "achieve economic diversification in preparation for the post-oil era."



WEEKLY ENERGY STATISTICS

US IMPORTS OF CANADIAN CRUDE
million bbl/day • preliminary data by EIA
US OIL INVENTORIES
million bbls • data by EIA

US OIL PROD'N & RIG COUNT
million bbl/day • data by EIA & Baker Hughes

2,957k
-90k ▼ 3.0%
BBL/D CDN EXPORTS TO US
9,342k
+22k ▲ 0.2%
BBL/D US PROD'N
509.91M
-6.43M ▼ 1.2%
BBL US INVENTORIES
733
+11 ▲ 1.5%
US RIG COUNT
CHANGE WK/WK  

Alberta's crude production dipped to 3.1 million bbl/day in March from 3.15 million in February due the Syncrude fire that took the Mildred Lake upgrader offline. Crude sales to Quebec surged to 121,000 bbl/day, up from 86,000 bbl/day the previous month. Exports to the US held steady at about 3 million bbl/day.

Canadian crude exports to the US by rail also powered higher in March, jumping to about 170,000 bbl/day. Crude-by-rail exports to the US hit a low of about 50,000 bbl/day in June of last year.

Total imports of Canadian crude into the US averaged 3.5 million bbl/day in March, about unchanged from the previous month.

Higher exports, lower imports and increases in refinery runs all led to a 6.4 million barrel drawdown in US crude oil stockpiles this week. US oil production rose to 9.34 million bbl/day, a level last seen in April 2015.

US rig counts jumped by 11 to 733, the highest since April 2015. Oil rig counts also rose by 11 in Canada to a total of 51, while the number of gas rigs fell by 5 to 48.

Oslo-based Rystad Energy is predicting that the US could produce 10 million bbl/day of crude by the end of this year, surpassing the 2015 high of 9.6 million bbl/day. Rystad says US production is growing much faster than anyone predicted, despite oil prices still stuck in the US$50/bbl range. The last time the US reached the 10 million mark was November 1970 when oil prices were US$3 a barrel.

The US Energy Information Administration (EIA) reported a second consecutive annual decline in proved oil reserves for 68 publicly traded oil companies listed on US exchanges. The decline was blamed squarely on write-downs in the oil sands, to the tune of 7.5 billion barrels. The 68 companies produce about 24 million bbl/day of oil globally and spent US$247 billion in capital last year, still 37% lower than the 5-year average.

This week's OPEC news . . .

Russia and OPEC released plans to strengthen their alliance this week, extending beyond OPEC's production quotas. OPEC's Secretary General Mohammad Barkindo called the agreement "the building blocks for a Catholic marriage," noting that he does not "expect a divorce." Barkindo and Russian Energy Minister Alexander Novak met in Moscow this week to discuss a path to formalizing the partnership. 

The heads of Rosneft and Saudi Aramco also met in St. Petersburg this week to discuss business opportunities. Rosneft CEO Igor Sechin has long been opposed to cutting production while the US sharply ramps-up production. Sechin released a statement that read "joint efforts on global oil market stabilization will ensure well-being and prosperity of Russia and Saudi Arabia" but also warned that production cuts are only a temporary solution.

Reuters is reporting that OPEC discussed the possibility of deeper production cuts last week. Members floated the idea of taking another 300,000 bbl/day off oil markets, on top of the 1.2 million bbl/day reduction also pledged. The next formal OPEC meeting is at the end of November. The Joint Ministerial Monitoring Committee will meet in Russia next month to monitor compliance and consider adjustment if necessary.

Total OPEC output rose in May to 32.33 million bbl/day, the first increase this year:

  • Output from Libya increased to 827,000 bbl/day in May, up from about 550,000 bbl/day in April. Libya's production is now at a 2.5 year high.
  • Nigerian production also increased thanks to the restart of the Forcados pipeline, which had been offline since February 2016.
  • Iraq's crude exports also hit a 2017 high in May, estimated at 3.93 million bbl/day.
  • Iran also saw a major increase in exports, rising to 2.2 million bbl/day last month.

WEEKLY MARKET SUMMARY

CURRENCIES • WEEKLY CLOSE
Friday close • data by Bank of Canada & ICE

96.67
-0.69 ▼ 0.7%
USD INDEX
74.05
-0.26 ▼ 0.4%
CDN DOLLAR
2.15%
-0.10 ▼ 4.4%
US 10Y Bond
1.40%
-0.04 ▼ 2.8%
CDN 10Y Bond
CHANGE WK/WK  

This week's notable Canadian economic news . . . 

The Conference Board of Canada thinks the West will lead economic growth this year, as Alberta emerges from two years of recession. Alberta is expected to grow 3.3%, followed by Saskatchewan and BC at 2.5% each. Newfoundland and Labrador is the only province expected to contract 3% this year but emerge from recession next year as Hebron comes online.

The International Monetary Fund (IMF) issued a rather gloomy outlook for Canada's economic growth noting that an aging population, high debt loads, declining labour productivity, sky-high home prices and rising US protectionism can't be good for the country. The agency thinks growth will be limited to 1.8% at best, assuming the real-estate market doesn't implode. The IMF is largely supportive of the federal government's wide deficits but says there's no need to further expand spending.

Accounting firm EY ranks Canada the 5th best place to invest, after the US, China, Germany and the UK.

This week's StatsCan releases . . . 

  • Canada's trade deficit narrowed to $370 million in April as exports rose 1.8% to $47.7 billion while imports gained 0.6% to $48.1 billion. Energy exports (including electricity) rose 2.5% to $8.8 billion, lead higher by a 18.5% gain in natural gas. Energy imports declined 14% to $2.3 billion due to less crude imported from overseas.
  • Real GDP rose 0.9% in the first quarter, led higher by strong consumer spending. Expressed at an annualized rate, Q1 GDP came in much better than expected at 3.7%.
  • March's GDP expanded 0.5% m/m, following a flat February. Growth was seen in the chemicals industry (+2.4%), petroleum (2.6%) and plastics (2.4%) as well as residential construction. Oil & gas extraction declined 0.4% in March, blamed on the Syncrude shutdown which occurred in the middle of the month. StatsCan also noted a major rebound in energy services, up 30% in the first quarter, reversing a downtrend that began in mid-2014.
  • Canada's current account deficit widened by $2.3 billion in Q1 to $14.1 billion. Canada maintains a trade surplus with the US thanks to a $2.5 billion increase in energy exports, mainly crude. The first quarter also saw a large flow of foreign funds into Canadian stock markets. Foreign investors now hold $60.7 billion in Canadian securities, almost double the previous quarter.
  • The Industrial Product Price Index (IPPI) rose 0.6% in April (from March), mainly due to higher prices for energy and petroleum products. Gasoline prices rose 5.8% from the previous month, now up 15.5% for the year.
  • The Raw Materials Price Index (RMPI) increased 1.6% last month, also attributed to higher prices for crude, which rose 3.9% for the month. Crude prices are now up 34.2% for the year.

OIL PRICES • WEEKLY CLOSE
Friday close, USD/bbl • data by CME Group

49.95
-2.20 ▼ 4.2%
BRENT USD/BBL
47.66
-2.14 ▼ 4.3%
WTI USD/BBL
44.63
-2.17 ▼ 4.6%
CDN LT USD/BBL
37.43
-2.48 ▼ 6.2%
WCS USD/BBL
CHANGE WK/WK  

May monthly average oil prices declined considerably from April (USD/bbl):

  • Brent: $51.35 (-4.6% m/m)
  • WTI: $48.54 (-5.0% m/m)
  • WCS: $38.78 (-6.3% m/m)
  • Canadian Light: $45.73 (-8.1% m/m)

The heavy oil discount held steady in May, averaging US$9.75 per barrel. Edmonton Condensate prices averaged $65.55/bbl (CAD) in May, down 1.7% from the previous month.

Average monthly natural gas prices faired better last month:

  • Henry Hub averaged US$3.24/MMBtu (+1.5% m/m)
  • AECO near month prices averaged $2.80/GJ (+6.8%) or US$2.18/MMBtu (+5.5%)

JP Morgan cut their 2018 forecast for oil prices this week by US$10/bbl to just US$42/bbl for WTI and US$48 for Brent. The bank expects WTI to average US$52.50 this year, US$3 lower than Brent. JP Morgan warns that "the longer-term consequences of OPEC’s actions will likely prove unpleasant for the cartel’s members," eventually leading to a collapse of the production cuts by the end of this year.

For the first 5 months of 2017, WTI has averaged about US$51/bbl.


ENERGY SECTOR PERFORMANCE
Friday close • data by TSX & NYSE
CANADIAN & US EQUITIES
Friday close • data by TSX & NYSE

SECTOR SUMMARY
Friday close • data by TSX & NYSE
TSX ENERGY STOCKS • WEEKLY CHANGE

Kinder Morgan Canada stock (KML) made its debut on the TSX this week. After IPOing at $17 a share and touching a low of $16, KML ended the week at $16.72.

This week's 52-week lows include Altagas (ALA), Baytex Energy (BTE), Bellatrix Exploration (BXE), Bonterra Energy (BNE), Cenovus Energy (CVE), Crescent Point Energy (CPG), Ensign Energy (ESI), Imperial Oil (IMO), Peyto Exploration (PEY), Precision Drilling (PD), Spartan Energy (SPE), TORC Oil & Gas (TOG) and Whitecap Resources (WCP).

NYSE ENERGY STOCKS • WEEKLY CHANGE

Goldman Sachs is recommending investors cut back their holdings in US shale oil due to "the combination of new project startups, shale productivity gains and rising OPEC production capacity." The investment firm expects WTI to return to US$55/bbl, eventually.

Marathon Petroleum (MPC) approved a US$3 billion share buyback this week, in addition to another US$2.14 billion worth of shares that still remain to be purchased under a previous plan. No specific timeline was given for the share repurchases.

Teekay Tankers (TNK) announced plans to buy all 30 million outstanding shares of Tanker Investments through a stock swap and the remaining 50% of Teekay Operations. The new company will have about US$2.4 billion in combined assets. After the transaction is completed, Teekay Tankers will have a fleet of 62 tankers, including 30 Suezmax tankers, 22 Aframax tankers, 9 LR2 Product tankers and one 50% owned VLCC.

Now that Tesoro Corp (TSO) has closed on its acquisition of Western Refining (WNR), the company has changed its name to Andeavor (ANDV). Subsidiary Tesoro Logistics (TLLP) will become Andeavor Logistics (ANDX). The name change comes with a new logo and new ticker symbols. The new Andeavor will continue to use the Tesoro brand at its retail gas stations.

This week's 52-week lows include ExxonMobil (XOM), Noble Energy (NBL), Range Energy (RRC) and Schlumberger (SLB).

US markets powered to new highs this week despite a lack-lustre jobs report.


UPGRADES & DOWNGRADES
  • Cenovus Energy (TSX:CVE): Downgraded from Hold to Sell at ValuEngine.
  • Chevron (NYSE:CVX): Upgraded from Sell to Hold at ValuEngine.
  • Crescent Point Energy (TSX:CPG): Downgraded from Hold to Sell at ValuEngine.
  • Kinder Morgan (TSX:KMI): Downgraded from Outperform to Market Perform at Wolfe Research.
  • Tesoro (NYSE:TSO): Upgraded from Equal Weight to Overweight at Morgan Stanley and from Sell to Hold at ValuEngine.
  • Valero Energy (NYSE:VLO): Downgraded from Overweight to Equal Weight at Morgan Stanley.

NEXT WEEK'S EVENTS

Tuesday:

  • President Barack Obama delivers speech at the Montreal Chamber of Commerce
  • API Weekly Statistical Bulletin released @ 4:30pm ET

Wednesday:

Thursday:

Friday:

  • May Labour Force Survey released by StatsCan @ 8:30am
  • Q1/2017 Industrial Capacity Utilization released by StatsCan @ 8:30am
  • Enbridge Mid-Year 2017 Investor Update in New York City, NY
  • Baker Hughes Rig Count released @ 1:00pm ET

Next edition of the Oil Sands Weekly: Friday June 9, 2017 @ 10pm MT.

The Oil Sands Weekly

The Oil Sands Weekly

The Oil Sands Weekly

The Oil Sands Weekly

0