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.
Weekly Energy Market Review

Weekly Energy Market Review

Energy market summary for the week ending June 23, 2017:

  • Oil prices continued to sink lower this week despite better than expected inventory and gasoline consumption numbers in the US.
  • Crude oil is now officially in bear market territory, having declined 20% from the highs of January.
  • Energy stocks continue to fall on both sides of the border. Both the TSX and S&P 500 energy sectors fell to 52-week lows this week.
MARKET OVERVIEW
  • Continuing on the trend of the previous few weeks, money continues to flow out of commodities and into treasuries.
  • The CRB commodities index hit a fresh 52-week lows this week, now back to the low of April 2016.
CURRENCIES & BONDS

  • The US dollar remains stuck in a trading, hovering near 97. Long duration bonds declined again this week, flattening the yield curve. 
  • Inflation continues to decelerate in Canada, falling from 1.4% annually to 1.3% in May. A big part of the decline was attributed to the Ontario government's decision to cut electricity rates in the province. After rising sharply through the beginning of this year, increases in energy prices appears to be slowing. Weak inflation data has lowered the odds of an interest rate hike causing the Canadian dollar gave back some of last week's gains.
  • Retail sales were reported at $48.6 billion in April, up 0.8% from the previous month. Gasoline prices jumped 9.5% in April, increasing sales at gasoline stations by 1.7%.
EQUITY MARKETS

  • The TSX has a good week, rebounding nicely on Friday.
  • The S&P 500 broke an intraday high on Friday (barely), ending the week little changed.
  • The Russell 2000 small cap index will get rebalanced next week (along will several other Russell indices). The new index will be less weighted towards financials and contain more energy and technology stocks.
CANADIAN SECTORS: TSX

US SECTORS: S&P 500
  • Most sectors gained ground on the TSX this week except for energy, which sank to a new yearly low.
  • A mixed bag in US markets as money rotated back into technology and healthcare stocks.
  • The US energy sector declined 3%, reversing gains from the past two weeks and also hovering near 52-week lows.
OIL PRICES

  • Despite drawdowns in crude stockpiles, strong gasoline consumption numbers and outages in the Gulf of Mexico due to Tropical Storm Cindy, oil prices continued to slide lower this week. Prices rebounded slightly on Friday, bringing WTI just above US$43/bbl.
  • Oil prices are now officially in bear market territory, having declined 20% from the highs of January.
 

WEEKLY US INVENTORY REPORT

JUNE 21, 2017

 
ENERGY SECTOR PERFORMANCE
  • BMO's Chief Investment Strategist Brian Belski says it's time to go bottom fishing in the Canadian energy patch. Among the banker's top picks are Canadian Natural Resources (CNQ), Encana (ECA), Enerplus (ERF), Peyto Exploration (PEY) and Tourmaline Oil (TOU). However, Belski says investors need to be patient as oil prices are unlikely to rebound before the second half of the year.

TSX ENERGY STOCKS
TSX: INTEGRATED & REFINERS
  • Imperial Oil (IMO) has received approval from the TSX to purchase up to 25.4 million shares over the next 12 months. Imperial has bought-back 50% of its outstanding shares since 1995 and says the buyback is "in the best interest of the company and its shareholders."
TSX: ENERGY SERVICES
  • Enerflex (EFX) has purchased the compression business of Mesa Compression for US$106 million in cash. The company says this deal will give it access to the growing compression platform in the US, allowing it to increase its coverage in the Permian and Scoop/Stack basins.
  • Total Energy Services (TOT) has completed its acquisition of Savanna Energy Corp (SVY). Savanna now becomes a wholly-owned subsidiary of Total Energy and its shares have been delisted from the TSX. Total has secured a $225 million loan from HSBC, used in part to repay Savanna's debtor Alberta Investment Management Corp (AIMCo), owed $104.5 million plus interest.
  • Western Energy Services (WRG) and ShawCor (SCL) hit 52-week lows this week.
TSX: MIDSTREAM
  • TransCanada (TRP) announced plans to spend $2 billion through 2021 to expand its NOVA Gas Transmission network, bringing more gas from Western Canada to key markets across North America.
  • Keyera (KEY) has issued $400 million in unsecured notes, with the proceeds going towards short-term debt reduction. The bond bear an interest rate of 3.68%, paid annually, maturing in September 2027.
  • Gibson Energy (GEI) announced several management changes this week. Incoming CEO Steve Spaulding has been appointed to the Board of Directors while the former CEO Stewart Hanlon has immediately stepped down from the Board. After 26 years of service, the company says Hanlon will continue on in an advisory capacity to facilitate a smooth management transition.
  • Inter Pipeline (IPL) and Precision Drilling (PD) hit 52-week lows this week.
TSX: LARGE CAP PRODUCERS
  • Ratings agencies DBRS has downgraded Cenvous' (CVE) credit rating from BBB (high) to BBB. Cenovus stock also declined on the news that CEO Brian Ferguson will be stepping down as CEO at the end of October.
  • Encana (ECA) says its "cube development approach combined with advanced completion practices" have significantly enhanced well performance at its Permian properties. Encana says it can safely execute its 5-year plan with oil prices at US$50 a barrel.
  • Crescent Point Energy (PCG), Cenovus (CVE) and Tourmaline Oil (TOU) hit new intraday 52-week lows this week.
TSX: MEDIUM CAP PRODUCERS
  • Birchcliff Energy (BIR), MEG Energy (MEG), Peyto Exploration & Development (PEY) and Whitecap Resources (WCP) hit new intraday 52-week lows on the TSX this week.
TSX: SMALL CAP PRODUCERS
  • Spartan Energy (SPE) executed a 3-for-1 reverse stock split this Friday, bringing the shares from about $2 to $6.
  • Baytex Energy (BTE), Bellatrix Exploration (BXE), Bonavista Energy (BNP), Bonterra Energy (BNE), Crew Energy (CR), Gran Tierra Energy (GTE), Pengrowth Energy (PGF), Penn West Petroleum (PWT), Surge Energy (SGY)  and TORC Oil & Gas (TOG) hit intraday 52-week lows on the TSX this week.

S&P 500 ENERGY STOCKS
S&P 500: INTEGRATED & REFINERS
  • Refiners Tesoro (TSO), Valero Energy (VLO) and Phillips 66 (PSX) were the least battered stocks in the energy patch this week, on improved refining margins brought on by lower crude prices.
  • Hess (HES) hits a intraday 52-week low this week.
S&P 500: ENERGY SERVICES
  • Schlumberger (SLB) is asking its shareholders to reject an unsolicited offer from Toronto-based TRC Capital Corporation to purchase up to 2 million shares of common stock at US$65.63 a share, slightly below the market price. TRC is a private investment firm, in the business of routinely making below-market tended offers for less than 5% of outstanding shares to avoid SEC disclosure laws.
  • Schlumberger (SLB) and Transocean (RIG) hit 52-week lows on the S&P 500 this week.
S&P 500: MIDSTREAM
S&P 500: LARGE CAP PRODUCERS
  • Occidental Petroleum (OXY) has agreed to a US$1.2 billion land swap which will see its production rise by 3,500 boe/day. The deal includes an enhanced oil recovery property and various pipeline assets. Occidental Petroleum is the largest operator in the Permian Basin.
  • This week's 52 week lows include Anadarko Petroleum (APC), Apache Corp (APA), Conocho Resources (CXO), Devon Energy (DVN), Marathon Oil (MRO) and Noble Energy (NBL).
S&P 500: MID CAP PRODUCERS
  • Pittsburg-based EQT Corp (EQT) has agreed to buy Rice Energy (RICE) for US$8.2 billion, including US$1.5 billion in debt. If the deal is approved, it would be the largest merger in the US shale gas space. EQT stick hit a 52-week low this week.
  • Cimarex Energy (XEC), Newfield Exploration (NFX) and Range Resources (RRC) also hit 52-week lows this week.

UPGRADES & DOWNGRADES
  • Baker Hughes (NYSE:BHI): Downgraded from Buy to Neutral at Seaport Global Securities and at Tudor Pickering.
  • Cenovus Energy (TSX:CVE): Upgraded from Hold to Buy at Canaccord Genuity and downgraded from Neutral to Underperform at Macquarie.
  • Chesapeake Energy (NYSE:CHK): Downgraded from Neutral to Underperform at Macquarie.
  • Chevron (NYSE:CVX): Downgraded from Outperform to Neutral at Macquarie.
  • Devon Energy (NYSE:DVN): Downgraded from Buy to Neutral at Seaport Global Securities.
  • Encana (TSX:ECA): Downgraded from Outperform to Neutral at Macquarie.
  • Marathon Oil (NYSE:MRO): Upgraded from Underweight to Equal Weight at Morgan Stanley and downgraded from Neutral to Sell at Seaport Global Securities.
  • Halliburton (NYSE:HAL): Downgraded from Buy to Neutral at Seaport Global Securities.
  • Hess Corp (NYSE:HES): Downgraded from Equal Weight to Underweight at Capital One Financial.
  • Pengrowth Energy (TSX:PGF): Downgraded from Buy to Neutral at Societe Generale.
  • Precision Drilling (NYSE:PDS): Downgraded from Overweight to Equal Weight at Morgan Stanley.
  • Schlumberger (NYSE:SLB): Downgraded from Overweight to Equal Weight at Barclays.
  • Valero Energy (NYSE:VLO): Upgraded from Hold to Buy at Jefferies Group.
Weekly Energy Market Review

Weekly Energy Market Review

Weekly Energy Market Review

Weekly Energy Market Review

0