WCS returns to lows of early 2016 as differential widens

WCS returns to lows of early 2016 as differential widens

Today's energy market summary:

  • Oil prices staged a small recovery on Friday, gaining on average just under 1%. Western Canadian Select was a notable exception, falling another 2% to US$24.87/bbl, the lowest since the spring of 2016.

  • Gasoline prices rallied 1.8%, reversing some of this week's losses. Henry Hub also rebounded 1.6%, while Alberta's AECO gas sank 6.3%.

  • According to Baker Hughes, the US put another 4 oil rigs into service this week, bringing the total to 873, the highest since March 2015.

  • Markets tried to rally at Friday's open, but mostly fizzled by the end of the day. Sentiment remains decidedly defensive, as funds continue to rotate into staples and utilities.

  • On the TSX, the energy sector rose 0.7%, with most components ending the day higher.

  • Despite higher oil prices, the US energy sector sank 0.8%, dragged lower by a meltdown in refining stocks. The declines were likely precipitated by Valero Energy's (VLO -10.3%) US$950 million buyout of Valero Energy Partners (VLP +6.8%), announced yesterday after the close.

Today's other notable market movers:

  • Enbridge (ENB.TO +1.3%) says its ruptured 36 inch natural gas pipeline should be put back into service sometime in mid-November, at about 80% of normal pressure. Once all repairs are completed, the system's capacity should return to a range of between 0.9 to 1.3 Bcf/day through the winter heating season.

  • Marathon Petroleum (MPC -6.2%) is mulling the sale of E15 gasoline in Minnesota, which contains as much as 15% ethanol. Minnesota is the fourth-largest producer of ethanol, which is presently cheaper than gasoline. The Trump Administration recently allowed refiners to raise ethanol ratios, in a bid to lower gas prices. The use of 15% ethanol blends in the summer is currently banned by the EPA due to smog concerns.

  • A crude pipeline in Columbia owned by Gran Tierra (GTE.TO -2.5%) was attacked by an unidentified armed group, resulting in an oil spill and fire. The company says the fire has since been extinguished, but provided no guidance on production impacts, if any.

  • According to Bloomberg, ExxonMobil (XOM +0.2%) is in talks with Rosneft on new oil and gas projects in Russia, despite the possibility of additional sanctions from the Trump Administration. Talks are in reference to natural gas, refining, and chemicals projects, none of which are currently subject to US sanctions.

  • Teekay Offshore Partners (TOO +1.8%) signed a 10-year deal with Alpha Petroleum Resources to use one of Teekay's FSPOs in the UK continental shelf.

  • Dominion Midstream Partners (DM +1.7%) increased its third quarter dividend by 5%, rising to US$0.3690 per share.

  • Extraction Oil & Gas (XOG -13.3%) cut its 2018 guidance by about 10% to about 75,000 boe/day.

Today's third quarter earnings releases:

  • Schlumberger (SLB +0.7%) reported a US$644 million profit for Q3, up 18% y/y, on revenues of US$8.5 billion, up 7.5%. The company warned of "rapid softening" in hydraulic fracturing activity, noting that growth out of the Permian is slowing due to transportation bottlenecks. The slowdown will likely be reflected in Q4 results. SLB shares hit a 6-year low today.

OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$79.78▲0.655.79
 
86.29
WTI$69.12▲0.749.58
 
76.41
CDN LT$44.12▲1.143.17
 
69.32
C5+$58.87▲0.851.37
 
71.40
WCS$24.87▼2.124.87
 
56.21
CRUDE OIL FUTURES CURVES
BRENT
WTI
█ OCT 19   █ OCT 12   █ OCT 5   █ SEP 28   (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
  • Baytex Energy (BTE +6%)
  • Altagas (ALA +3.6%)
  • ARC Resources (ARX +2.7%)
  • Inter Pipeline (IPL +2.5%)
  • Tourmaline (TOU +2.3%)
  • 12-MO HIGHS
  • Gibson Energy (GEI -0.8%)
  • 10-YR HIGHS
  • None
  • GOLDEN CROSSES
  • None
  • TSX BEARISH INDICATORS
    BOTTOM
    5
  • Gran Tierra (GTE -2.5%)
  • Ensign Energy Services (ESI -2.4%)
  • Trican Well (TCW -1.6%)
  • Parex Resources (PXT -1.2%)
  • Precision Drilling (PD -1.1%)
  • 12-MO LOWS
  • Trican Well (TCW -1.6%)
  • Vermilion Energy (VET -0.8%)
  • 10-YR LOWS
  • None
  • DEATH CROSSES
  • None
  • COMPANY TICKER CLOSE %CHG L 52WK H RANK  CHARTS
    INTEGRATED
    SuncorSU46.85▲1.040.49
     
    55.4732D   W
    Imperial OilIMO43.81▲1.333.43
     
    44.9194D   W
    Husky EnergyHSE20.08▲1.115.09
     
    22.9975D   W
    MIDSTREAM
    EnbridgeENB42.88▲1.337.36
     
    51.0480D   W
    TransCanadaTRP53.43▲1.550.28
     
    65.1858D   W
    Pembina PipelinePPL44.83▲1.637.60
     
    47.8490D   W
    Inter PipelineIPL22.49▲2.521.36
     
    27.9244D   W
    Keyera KEY34.91▲1.831.20
     
    38.9164D   W
    Gibson EnergyGEI22.70▼-0.815.68
     
    23.0498D   W
    LARGE CAP E&P
    Cdn Natural ResCNQ37.17▲0.336.47
     
    49.0811D   W
    EncanaECA14.71▲1.212.37
     
    18.5419D   W
    Cenovus EnergyCVE11.15▲0.39.03
     
    14.8420D   W
    TourmalineTOU19.94▲2.317.78
     
    27.2615D   W
    Seven GenerationsVII14.44▲1.013.62
     
    21.2515D   W
    SERVICES
    ShawcorSCL24.36▲1.423.22
     
    29.5031D   W
    Pason SystemsPSI20.140.016.05
     
    22.1088D   W
    Mullen Group MTL15.21▲0.114.10
     
    17.1272D   W
    EnerflexEFX16.79▲1.513.55
     
    17.8292D   W
    Secure EnergySES7.98▼-0.16.98
     
    9.8257D   W
    REFINING & MARKETING
    Parkland FuelPKI45.88▼-0.723.41
     
    47.4598D   W
    S&P 500 ENERGY STOCKS
    SPX BULLISH INDICATORS
    TOP 5
  • Cabot Oil & Gas (COG +1.6%)
  • ONEOK (OKE +1.3%)
  • Cimarex Energy (XEC +0.9%)
  • Marathon Oil (MRO +0.6%)
  • Chevron (CVX +0.6%)
  • 12-MO HIGHS
  • None
  • 10-YR HIGHS
  • None
  • GOLDEN CROSSES
  • None
  • SPX BEARISH INDICATORS
    BOTTOM
    5
  • Valero Energy (VLO -10.3%)
  • HollyFrontier (HFC -7%)
  • Marathon Petroleum (MPC -6.3%)
  • Phillips 66 (PSX -5.8%)
  • Noble Energy (NBL -4.9%)
  • 12-MO LOWS
  • Schlumberger (SLB +0.1%)
  • 10-YR LOWS
  • None
  • DEATH CROSSES
  • None
  • COMPANY TICKER CLOSE %CHG L 52WK H RANK  CHARTS
    INTEGRATED
    Exxon MobilXOM81.97▲0.172.16
     
    89.3065D   W
    ChevronCVX118.14▲0.6108.02
     
    133.8852D   W
    MIDSTREAM
    Kinder MorganKMI17.98▲0.214.69
     
    19.8379D   W
    Williams CoWMB26.74▲0.324.00
     
    33.6754D   W
    ONEOKOKE67.79▲1.349.65
     
    71.9985D   W
    LARGE CAP E&P
    ConocoPhillipsCOP72.49▼-0.148.97
     
    80.2479D   W
    EOG ResourcesEOG117.67▼-0.795.36
     
    133.5358↓D   W
    Occidental PetroleumOXY72.18▲0.462.47
     
    87.6731D   W
    Anadarko PetroleumAPC66.00▼-0.746.75
     
    76.7062D   W
    Concho ResourcesCXO147.54▼-0.2123.63
     
    163.1160D   W
    SERVICES
    SchlumbergerSLB58.47▲0.157.59
     
    80.3523D   W
    HalliburtonHAL37.54▼-1.235.75
     
    57.869D   W
    National-Oilwell VarcoNOV40.40▼-0.931.47
     
    49.0852↓D   W
    TechnipFMCFTI29.34▼-0.324.53
     
    35.0031D   W
    Baker HughesBHGE29.94▼-1.725.53
     
    37.7622D   W
    REFINERS
    Phillips 66PSX102.77▼-5.889.14
     
    123.9732D   W
    Valero EnergyVLO92.76▼-10.375.84
     
    126.9811D   W
    Marathon PetroleumMPC73.92▼-6.355.87
     
    88.4533D   W
    HollyFrontierHFC63.17▼-7.035.49
     
    83.2856D   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.A65.53▲1.360.62
     
    73.8650D   W
    TotalTOT60.81▲0.453.37
     
    65.6953D   W
    BPBP44.00▲0.336.15
     
    47.8362↓D   W
    EniE35.48▲1.431.58
     
    40.1542D   W
    EquinorEQNR26.98▲2.319.74
     
    28.9378D   W
    ANALYST RATINGS

    UPGRADES

    • Imperial Oil (IMO.TO): Upgraded from Sell to Buy at Goldman Sachs.

    • Marathon Oil (MRO): Upgraded from Neutral to Buy at Mizuho.

    • Murphy Oil (MUR): Upgraded from Underperform to Neutral at Mizuho.

    DOWNGRADES

    • Valero Energy (VLO): Downgraded from Neutral to Sell at Goldman Sachs.

    • Valero Energy Partners (VLP): Downgraded from Buy to Hold at SunTrust Banks and from Outperform to Sector Perform at RBC.


    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.
    Canadian Light sinks to 15-month low as discount widens to US$28

    Canadian Light sinks to 15-month low as discount widens to US$28

    Oil prices stumble as markets turn defensive

    Oil prices stumble as markets turn defensive