Oil prices stumble as markets turn defensive

Oil prices stumble as markets turn defensive

Today's energy market summary:

  • Equity markets continued to sell-off today, as traders rotate from growth to value, shifting funds out of stocks and into the US dollar on Thursday.

  • Oil prices fell in sympathy, with Brent giving back almost 1% and WTI declining 1.6%. Canadian light and heavy crude retreated about 3% for the day, with Western Canadian Select returning to its 1-year low.

  • Gasoline prices declined for the second day in a row, falling another 1.5%. Natural gas gave back yesterday's gains, as Henry Hub declined 3.7%, while AECO gas fell 3.3%.

  • The TSX energy sector dipped 1.5%, with most components posting losses for the day. Heavy-weights Enbridge (ENB.TO +0.4%) and TransCanada (TRP.TO +0.4%) were notable exceptions, lifting the entire midstream subsector out of the red.

  • The US energy basket also dipped 0.5% on the S&P 500, despite gains in mega-cap integrated names.

  • European ADRs listed on the NYSE posted another day of losses as the Euro and pound sterling both weakened against the greenback.

Today's other notable market movers:

  • After yesterday's rejection letter from MEG Energy (MEG.TO +0.5%), Husky Energy (HSE.TO +0.2%) says they respectfully disagree with MEG's Board of Directors, calling their $11/share offer "compelling" and beneficial to both companies. Husky says the deal is in the best interest of MEG shareholders, who have until January 16 to tender their shares. 

  • AltaGas (ALA.TO -0.9%) plans to raise $239 million from the IPO of AltaGas Canada, pricing 16.5 million shares at $14.50, significantly lower than initially planned. The IPO is intended to pay down debt incurred during the company's US$4.5 billion takeover of WGL Holdings. ALA shares have dropped almost 40% since the deal was announced at the beginning of 2017, then declined over 10% after reporting plans to IPO its Canadian power assets.

  • ExxonMobil (XOM +0.4%) signed a 20-year LNG supply agreement with China's Zhejiang Provincial Energy Group. Last month, Exxon agreed to participate in the construction of an LNG import terminal in the Guangdong region, including the provision of gas supplies.

  • BP (BP -1.1%) announced the start-up of the Thunder Horse Northwest Expansion project in the deepwater Gulf of Mexico, four months ahead of schedule and 15% under-budget. This latest expansion will add 30,000 boe/day at its peak.  

  • Equinor (EQNR -2.4%) continued its garage sale today, this time selling its 42.4% stake in the Tommeliten discovery on the Norwegian Continental Shelf to Poland's PGNiG for US$220 million. The gas and condensate field is operated by ConocoPhillips (COP +0.2%) and holds an estimated 52 million boe of net recoverable resources.

  • SM Energy (SM -3.4%) says its third quarter production will be about 130,200 boe/day, better than expected on the high end of guidance. The improvement was attributed to better than expected performance in the Midland Basin and higher processed NGL volumes in the Eagle Ford.

  • Valero Energy (VLO -0.3%) has agreed to buy its MLP Valero Energy Partners (VLP +1.1%) for US$42.25 a share in cash, representing a 12% premium to prices prior to the announcement.

  • CNX Midstream Partners (CNXM -1.7%) raised its third quarter dividend to US$0.3479 per share, a 3.5% increase from the previous quarter.

Today's third quarter earnings releases:

  • CP Rail (CP.TO -2.9%) reported a 20% jump in revenues, rising to $1.9 billion in Q3. Revenues from the transport of energy, chemicals and plastics jumped 58%, now accounting for almost 20% of CP's total revenues. The company says much of that increase was attributed to higher demand for refined products and crude oil.

  • Echoing a similar sentiment from Jefferies earlier this week, JPMorgan issued a rather downbeat forecast for oil service providers, particularly Canadian firms. The bank downgraded Calfrac Well Services (CFW.TO -0.5%) and Trican Well Service (TCW.TO -6.7%) and is predicting "uninspiring" earnings from Schlumberger (SLB -1.4%) and Baker Hughes (BHGE -1.1%). SLB is due to report Q3 results tomorrow.

  • CIBC reduced its target price on Kinder Morgan Canada (KML.TO -2.5%), citing contract expiry at its Edmonton rail terminal in April 2020. At the same time, parent-company Kinder Morgan (KMI -0.1%) had its price target bumped up at RBC Capital.

OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$79.29▼0.955.62
 
86.29
WTI$68.65▼1.649.29
 
76.41
CDN LT$43.65▼2.543.17
 
69.32
C5+$58.40▼1.851.08
 
71.40
WCS$25.40▼3.125.40
 
56.21
CRUDE OIL FUTURES CURVES
BRENT
WTI
█ OCT 18   █ OCT 11   █ OCT 4   █ SEP 27   (USD/BBL)
MARKET OVERVIEW
MARKETS
CURRENCIES & YIELDS
    TSX SECTORS
52-WK
    SPX SECTORS
52-WK
ENERGY SECTORS

TSX ENERGY SUB-SECTORS

SPX ENERGY SUB-SECTORS
TSX ENERGY STOCKS
TSX BULLISH INDICATORS
TOP 5
  • Ensign Energy Services (ESI +1.1%)
  • MEG Energy (MEG +0.6%)
  • Mullen Group (MTL +0.5%)
  • TransCanada (TRP +0.4%)
  • Enbridge (ENB +0.4%)
  • 12-MO HIGHS
  • None
  • 10-YR HIGHS
  • None
  • GOLDEN CROSSES
  • None
  • TSX BEARISH INDICATORS
    BOTTOM
    5
  • Trican Well (TCW -6.7%)
  • Birchcliff Energy (BIR -6.6%)
  • Paramount Resources (POU -5.3%)
  • Baytex Energy (BTE -5.1%)
  • Seven Generations (VII -4.5%)
  • 12-MO LOWS
  • Cdn Natural Res (CNQ -0.7%)
  • Baytex Energy (BTE -5.1%)
  • CES Energy Solutions (CEU -1.9%)
  • Freehold Royalties (FRU -1.3%)
  • Nuvista Energy (NVA -4.3%)
  • Paramount Resources (POU -5.3%)
  • Trican Well (TCW -6.7%)
  • Vermilion Energy (VET -3.2%)
  • Whitecap Resources (WCP -1.7%)
  • 10-YR LOWS
  • None
  • DEATH CROSSES
  • None
  • COMPANY TICKER CLOSE %CHG L 52WK H RANK  CHARTS
    INTEGRATED
    SuncorSU46.40▼-1.640.49
     
    55.4729D   W
    Imperial OilIMO43.23▼-1.733.43
     
    44.9194D   W
    Husky EnergyHSE19.87▲0.215.09
     
    22.9957D   W
    MIDSTREAM
    EnbridgeENB42.35▲0.437.36
     
    51.7967D   W
    TransCanadaTRP52.62▲0.450.28
     
    65.1846D   W
    Pembina PipelinePPL44.14▼-1.237.60
     
    47.8487D   W
    Inter PipelineIPL22.09▼-0.321.36
     
    27.9234D   W
    Keyera KEY34.45▼-2.331.20
     
    38.9150D   W
    Gibson EnergyGEI22.89▼-0.415.68
     
    23.0098D   W
    LARGE CAP E&P
    Cdn Natural ResCNQ37.05▼-0.736.47
     
    49.0811D   W
    EncanaECA14.54▼-0.712.37
     
    18.5418D   W
    Cenovus EnergyCVE11.12▼-1.59.03
     
    14.8417D   W
    TourmalineTOU19.50▼-2.917.78
     
    27.2612D   W
    Seven GenerationsVII14.30▼-4.513.62
     
    21.2514D   W
    SERVICES
    ShawcorSCL24.02▲0.323.22
     
    29.5024D   W
    Pason SystemsPSI20.14▼-0.116.05
     
    22.1089D   W
    Mullen Group MTL15.20▲0.514.10
     
    17.1269D   W
    EnerflexEFX16.550.013.55
     
    17.9891D   W
    Secure EnergySES7.99▲0.16.98
     
    9.8258D   W
    REFINING & MARKETING
    Parkland FuelPKI46.28▼-0.523.41
     
    47.4598D   W
    S&P 500 ENERGY STOCKS
    SPX BULLISH INDICATORS
    TOP 5
  • HollyFrontier (HFC +1.8%)
  • Exxon Mobil (XOM +0.4%)
  • Phillips 66 (PSX +0.3%)
  • ConocoPhillips (COP +0.2%)
  • Chevron (CVX +0.1%)
  • 12-MO HIGHS
  • None
  • 10-YR HIGHS
  • None
  • GOLDEN CROSSES
  • None
  • SPX BEARISH INDICATORS
    BOTTOM
    5
  • Halliburton (HAL -3.9%)
  • National-Oilwell Varco (NOV -2.7%)
  • Devon Energy (DVN -2.5%)
  • Helmerich & Payne (HP -2.5%)
  • Newfield Exploration (NFX -2.4%)
  • 12-MO LOWS
  • Schlumberger (SLB -1.4%)
  • 10-YR LOWS
  • None
  • DEATH CROSSES
  • Baker Hughes (BHGE -1.1%)
  • COMPANY TICKER CLOSE %CHG L 52WK H RANK  CHARTS
    INTEGRATED
    Exxon MobilXOM81.85▲0.472.16
     
    89.3064D   W
    ChevronCVX117.47▲0.1108.02
     
    133.8849D   W
    MIDSTREAM
    Kinder MorganKMI17.94▼-0.214.69
     
    19.8378D   W
    Williams CoWMB26.65▼-0.924.00
     
    33.6751D   W
    ONEOKOKE66.92▼-0.249.65
     
    71.9979D   W
    LARGE CAP E&P
    ConocoPhillipsCOP72.59▲0.248.97
     
    80.2481D   W
    EOG ResourcesEOG118.55▼-1.395.36
     
    133.5361↓D   W
    Occidental PetroleumOXY71.90▼-1.362.47
     
    87.6732D   W
    Anadarko PetroleumAPC66.50▼-0.846.75
     
    76.7066D   W
    Concho ResourcesCXO147.95▼-1.7123.63
     
    163.1158↓D   W
    SERVICES
    SchlumbergerSLB58.43▼-1.458.08
     
    80.3522D   W
    HalliburtonHAL38.00▼-3.935.75
     
    57.8610D   W
    National-Oilwell VarcoNOV40.75▼-2.731.47
     
    49.0854D   W
    TechnipFMCFTI29.43▼-1.024.53
     
    35.0034D   W
    Baker HughesBHGE30.46▼-1.125.53
     
    37.7628D   W
    REFINERS
    Phillips 66PSX109.12▲0.389.14
     
    123.9757D   W
    Valero EnergyVLO103.39▼-0.375.84
     
    126.9839D   W
    Marathon PetroleumMPC78.82▼-0.455.87
     
    88.4561D   W
    HollyFrontierHFC67.95▲1.835.49
     
    83.2890D   W
    NYSE ADRs
    ADRs BULLISH INDICATORS
    12-MO HIGHS
  • None
  • 10-YR HIGHS
  • None
  • GOLDEN CROSSES
  • None
  • ADRs BEARISH INDICATORS
    12-MO LOWS
  • None
  • 10-YR LOWS
  • None
  • DEATH CROSSES
  • None
  • COMPANY TICKER CLOSE %CHG L 52WK H RANK  CHARTS
    Royal Dutch ShellRDS.A64.70▼-0.760.43
     
    73.8644D   W
    TotalTOT60.53▼-1.953.37
     
    65.6952D   W
    BPBP43.86▼-1.136.15
     
    47.8363↓D   W
    EniE34.93▼-2.631.58
     
    40.1535D   W
    EquinorEQNR26.39▼-2.419.74
     
    28.9370↓D   W
    ANALYST RATINGS

    UPGRADES

    • Diamond Offshore Drilling (DO): Upgraded from Reduce to Accumulate at UBS.

    • Transocean (RIG): Upgraded from Accumulate to Buy at UBS.

    DOWNGRADES

    • Calfrac Well Services (CFW.TO): Downgraded from Neutral to Underweight at JPMorgan.

    • Halliburton (HAL): Downgraded from Buy to Neutral at Cleveland Research.

    • Superior Energy Services (SPN): Downgraded from Buy to Neutral at Cleveland Research.

    • Trican Well Service (TCW.TO): Downgraded from Neutral to Underweight at JPMorgan.


    UPDATED: DAILY (END-OF-DAY)

    SOURCES:
    • OIL PRICES REFLECT NEAR MONTH CONTRACT FROM THE NYMEX/CME GROUP
    • EQUITY PRICES PROVIDED BY NYSE & TMX GROUP
    • CHARTPACKS COURTESY STOCKCHARTS.COM (DIVIDEND ADJUSTED)

    NOTES:
    • 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

    RANK:
    • 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.
    WCS returns to lows of early 2016 as differential widens

    WCS returns to lows of early 2016 as differential widens

    Surprise build in US crude stockpiles drag oil prices lower

    Surprise build in US crude stockpiles drag oil prices lower