Oil prices halt slide despite IEA warning of slower demand growth
Today's energy market summary:
Henry Hub natural gas prices declined another 2% today.
After being flat to lower for several months, Baker Hughes reported an increase in US oil rig counts today, rising by eight to a total of 869, the highest since March 2015. Canada also added 8 rigs, bringing the total of active oil rigs to 127.
Production out of the Gulf of Mexico continues to ramp up as companies work to restore operations on almost 90 platforms evacuated earlier in the week. Lost oil production out of the region has now reached about 3 million barrels, with 550,000 bbl/day yet to be restored.
The International Energy Agency trimmed its demand forecast by about 100,000 bbl/day for this year and next due to higher oil prices, ongoing trade concerns, a weaker economic outlook and downward revision in Chinese data.
After several days of heavy sell-offs, global markets recovered slightly today. The Canadian and US energy sectors also rose today, gaining 0.8% and 0.3%, respectively. Service sector stocks were the worst hit in Canada, while majors ExxonMobil (XOM -0.3%) and Chevron (CVX -0.6%) were the biggest drags in US energy markets.
Today's energy market movers:
Marathon Petroleum (MPC +1.7%) and Royal Dutch Shell (RDS.A -0.2%) were forced to shutdown their refineries in Washington State due to a loss of natural gas supply from BC. A third refinery, belonging to Philips 66 (PSX +0.3%), also curtailed production, sending gasoline prices sharply higher in the region. BC normally supplies about 1.1 Bcf/day of gas to the state, but volumes were cut to zero on Wednesday after an explosion near Prince George forced the shutdown of two Enbridge (ENB.TO +0.5%) pipelines. Enbridge has since restarted one of the lines and is in the process of restoring supplies to the US.
According to Bloomberg, French utility provider Engie and Quebec's Caisse de Depot are in talks to buy PetroBras' (PBR +3.3%) natural gas pipeline network, for as much as US$9 billion, about US$1 billion more than their initial bid. The 4,500 km TAG network spans ten states in northeastern Brazil and would be the company's largest divestment ever.
According to Reuters, Royal Dutch Shell (RDS.A -0.2%) is in talks to sell its 40% stake in its JV with Venezuela's PDVSA to French producer Maurel & Prom. The division produced about 33,000 bbl/day in 2016 in the western state of Zulia near Colombia. A sale would require approval from the Venezuelan government.
Noble Corp (NE +4.5%) plans to put two of its idled drillships back into service over the next few months, with one ship to be deployed in the US Gulf of Mexico for Talos Energy (TALO +1.1%) and another in Bulgaria for French oil major Total (TOT n/c).
|CURRENCIES & YIELDS|
TSX ENERGY SUB-SECTORS|
SPX ENERGY SUB-SECTORS|
|Imperial Oil||IMO||42.72||▲0.7||33.43||44.91||93||D W|
|Husky Energy||HSE||20.25||▲1.6||15.09||22.99||83||D W|
|Pembina Pipeline||PPL||43.93||▲1.1||37.60||47.84||87||D W|
|Inter Pipeline||IPL||21.66||▼-1.0||21.36||27.92||23||D W|
|Gibson Energy||GEI||20.93||▲0.8||15.68||21.64||96||D W|
|LARGE CAP E&P|
|Cdn Natural Res||CNQ||37.85||▲0.5||36.88||49.08||12||D W|
|Cenovus Energy||CVE||11.42||▼-2.3||9.03||14.84||19||D W|
|Seven Generations||VII||15.28||0.0||13.62||21.25||35||D W|
|Pason Systems||PSI||20.11||▼-0.3||16.05||22.10||87||D W|
|Mullen Group||MTL||14.82||▲0.2||14.10||17.12||46||D W|
|Secure Energy||SES||7.93||▼-1.3||6.98||9.82||58||D W|
|REFINING & MARKETING|
|Parkland Fuel||PKI||45.96||▲3.1||23.41||46.46||98||D W|
|Exxon Mobil||XOM||81.38||▼-0.3||72.16||89.30||68||D W|
|Kinder Morgan||KMI||17.51||▲0.5||14.69||19.83||76||D W|
|Williams Co||WMB||26.68||▲0.3||24.00||33.67||55||D W|
|LARGE CAP E&P|
|EOG Resources||EOG||122.18||▲0.4||95.36||133.53||85↓||D W|
|Occidental Petroleum||OXY||76.96||▲0.6||62.47||87.67||65||D W|
|Anadarko Petroleum||APC||67.63||▲2.0||46.75||76.70||86||D W|
|Concho Resources||CXO||150.43||▼-0.1||123.63||163.11||76||D W|
|National-Oilwell Varco||NOV||41.91||▼0.0||31.47||49.08||72||D W|
|Baker Hughes||BHGE||30.85||▲0.6||25.53||37.76||39||D W|
|Phillips 66||PSX||109.46||▼0.0||89.14||123.97||61↓||D W|
|Valero Energy||VLO||108.25||▲1.3||75.84||126.98||59||D W|
|Marathon Petroleum||MPC||80.08||▲1.7||55.68||88.45||73||D W|
Ensco (ESV): Upgraded from Hold to Buy at Societe Generale and from Underweight to Neutral at JPMorgan.
Noble (NE): Upgraded from Hold to Buy at Societe Generale.
Oceaneering International (OII): Upgraded from Hold to Buy at Societe Generale.
Valero Energy (VLO): Upgraded from Hold to Buy at Standpoint Research.
Antero Midstream Partners (AM): Downgraded from Overweight to Equal Weight at Barclays.
Diamond Offshore Drilling (DO): Downgraded from Neutral to Underweight at JPMorgan.
Halliburton (HAL): Downgraded from Buy to Hold at Societe Generale.
Rowan Companies (RDC): Downgraded from Overweight to Neutral at JP Morgan.
Sunoco (SUN): Downgraded from Overweight to Neutral at JP Morgan.
Weatherford International (WFT): Downgraded from Buy to Sell at Societe Generale.
UPDATED: DAILY (END-OF-DAY)
• OIL PRICES REFLECT NEAR MONTH CONTRACT FROM THE NYMEX/CME GROUP
• EQUITY PRICES PROVIDED BY NYSE & TMX GROUP
• CHARTPACKS COURTESY STOCKCHARTS.COM (DIVIDEND ADJUSTED)
• OIL PRICES, FUTURES AND DIFFERENTIALS IN USD/BBL
• C5+ = EDMONTON CONDENSATE
• FUTURES CURVES SHOW PRICES FOR NEAR-MONTH CONTRACT (C1) AND NEXT 5-MONTHS (C2-C6)
• TSX SHARE PRICES IN CAD; S&P 500 PRICES IN USD
• ADR: AMERICAN DEPOSITORY RECEIPTS LISTED ON NYSE IN USD
• SHARE PRICE CHANGES (INCL. NEW HIGHS & LOWS) EXCLUDE DIVIDENDS
• BASED ON STOCKCHARTS TECHNICAL RANK (SCTR)
• REFLECTS RELATIVE STRENGTH AMONG OTHER ENERGY STOCKS (PERCENTILE RANKING)
• RISING RANK (↑) REFLECTS INCREASING RELATIVE STRENGTH
• FALLING RANK (↓) REFLECTS DECREASING RELATIVE STRENGTH.