Market meltdown continues as WCS discount to WTI hits another all-time high
Today's energy market summary:
Brent and WTI declined over 3% for the day after the Energy Information Administration (EIA) reported a 6 million barrel build in crude stockpiles. US crude output rose to a record 11.2 million bbl/day, as production out of the Lower 48 continues to rise to record levels.
Western Canadian Select (WCS) declined a whopping 13% as the discount to WTI widened to US$45 a barrel, a new all-time high. The Canadian heavy benchmark ended the day at just under US$26, the lowest since August 2016.
Production in the Gulf of Mexico is slowly returning to normal after Hurricane Michael passed through the region yesterday. An estimated 2.4 million barrels of oil were shut-in due to the storm since Monday.
Global equity markets skidded lower again, continuing from yesterday’s sell-off. Energy was the worst performing sector on both the TSX and S&P 500, falling about 3%. Declines were broadly based across all of the subsectors, with Shawcor (SCL.TO -0.7%) falling to record low and Schlumberger (SLB -2.8%) reaching a new 12-month low.
Today's market movers:
After two of its natural gas pipelines were shutdown in northern BC on Tuesday, Enbridge (ENB.TO -2.6%) says one of those lines has been returned to service, and is slowly ramping up to full pressure. The shutdown occurred after an adjacent 36-inch ruptured and exploded just north of Prince George. The company has yet to establish a timetable for the ruptured pipeline.
After approving the Ohio segment of its TEAL pipeline on Tuesday, US federal regulators (FERC) approved the partial start-up of Enbridge's U$2.6 billion NEXUS pipeline, which runs from Ohio to Michigan. The 1.5 Bcf/day pipeline is jointly owned with DTE Energy (DTE -1.9%).
Murphy Oil (MUR +11.6%) announced a joint-venture with Brazil's Petrobras (PBR -1.6%) to explore oil and gas fields in the Gulf of Mexico. The JV will be split 80/20 MUR/PBR. Murphy has agreed to pay Petrobras $900 million in cash, plus up to $150 million in contingencies based on price and production thresholds.
Despite a decline in the US dollar, foreign ADRs listed on the NYSE also sank lower again today.
|CURRENCIES & YIELDS|
TSX ENERGY SUB-SECTORS|
SPX ENERGY SUB-SECTORS|
|Imperial Oil||IMO||42.44||▼-0.9||33.43||44.91||93||D W|
|Husky Energy||HSE||19.93||▼-2.5||15.09||22.99||74||D W|
|Pembina Pipeline||PPL||43.45||▼-1.5||37.60||47.84||85||D W|
|Inter Pipeline||IPL||21.88||▼-0.5||21.36||27.92||31||D W|
|Gibson Energy||GEI||20.77||▼-1.9||15.68||21.64||96||D W|
|LARGE CAP E&P|
|Cdn Natural Res||CNQ||37.65||▼-3.8||36.88||49.08||12||D W|
|Cenovus Energy||CVE||11.69||▼-3.5||9.03||14.84||29↓||D W|
|Seven Generations||VII||15.28||▼-3.6||13.62||21.25||37||D W|
|Pason Systems||PSI||20.16||▼-3.2||16.05||22.10||88||D W|
|Mullen Group||MTL||14.79||▼-2.5||14.10||17.12||45||D W|
|Secure Energy||SES||8.03||▼-3.7||6.98||9.82||71||D W|
|REFINING & MARKETING|
|Parkland Fuel||PKI||44.59||▲0.7||23.41||45.49||98||D W|
|Exxon Mobil||XOM||81.60||▼-3.5||72.16||89.30||76||D W|
|Kinder Morgan||KMI||17.42||▼-3.2||14.69||19.83||80||D W|
|Williams Co||WMB||26.59||▼-2.2||24.00||33.67||58||D W|
|LARGE CAP E&P|
|EOG Resources||EOG||121.62||▼-3.8||95.36||133.53||87||D W|
|Occidental Petroleum||OXY||76.53||▼-1.8||62.47||87.67||68||D W|
|Anadarko Petroleum||APC||66.28||▼-2.5||46.75||76.70||83||D W|
|Concho Resources||CXO||150.56||▼-1.7||123.63||163.11||81||D W|
|National-Oilwell Varco||NOV||41.90||▼-2.3||31.47||49.08||75||D W|
|Baker Hughes||BHGE||30.66||▼-4.0||25.53||37.76||37||D W|
|Phillips 66||PSX||109.46||▼-3.2||89.14||123.97||67||D W|
|Valero Energy||VLO||106.89||▼-3.6||75.84||126.98||58↓||D W|
|Marathon Petroleum||MPC||78.73||▼-2.4||55.68||88.45||72↓||D W|
California Resources (CRC): Upgraded from Hold to Buy at Societe Generale.
Marathon Petroleum (MPC): Upgraded from Hold to Buy at Tudor Pickering.
Murphy Oil (MUR): Upgraded from Hold to Buy at National Alliance Securities.
UPDATED: DAILY (END-OF-DAY)
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• OIL PRICES, FUTURES AND DIFFERENTIALS IN USD/BBL
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• REFLECTS RELATIVE STRENGTH AMONG OTHER ENERGY STOCKS (PERCENTILE RANKING)
• RISING RANK (↑) REFLECTS INCREASING RELATIVE STRENGTH
• FALLING RANK (↓) REFLECTS DECREASING RELATIVE STRENGTH.