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

Today's energy market summary:

  • Global oil prices were roughly unchanged for the day, despite ongoing concerns over the Chinese economy and a continued sell-off in Saudi markets.

  • Canadian Light sank almost 7%, returning to the lows of June 2017. The discount has now widened to US$28 a barrel, up from just over US$5 in early August. WCS gained ground for the first time in four days, ending Monday above US$25/bbl.

  • US natural gas prices sank 3.5% on Monday, reversing gains from last Friday. Gasoline prices were roughly unchanged.

  • Despite a rebound in Chinese markets overnight, North American markets ended the day flat to lower, as concerns linger over Q3 results due from many large caps names this week. Traders dipped their toes back into technology and discretionary stocks, two beaten down sectors on both sides of the border.

  • The TSX energy sector was roughly unchanged, while SPX energy declined over 1%. Energy services was the best performing subsector on the TSX, while many smaller producers hit new 52-week lows for the day. Most SPX energy components declined on Monday, except for refining stocks, which rebounded slightly from last week's meltdown.

  • European ADRs also declined as the US dollar posted a gain of 0.3%.

Today's notable market movers:

  • After being offline for almost two years, Imperial Oil (IMO +0.1%) announced the restart of operations at Norman Wells. The facility was shutdown at the end of 2016 after a product pipeline was taken out of service due to a slope stability issue. Imperial says output will gradually increase to about 10,000 bbl/day, on par with production levels before the shutdown.

  • Enbridge (ENB -1.6%) has asked US federal regulators (FERC) for permission to put more of its NEXUS natural gas pipeline into service, after another section in Ohio was reported mechanically complete last week. The US$2.6 billion pipeline is jointly held with DTE Energy (DTE -0.6%).

  • Total (TOT -1.7%) has revised an existing LNG supply agreement with China's CNOOC (CEO +1.2%), boosting volumes by 50% to 1.5 million t/y, and extending the term by an extra five years to 20 years. 

  • UK regulators have approved BP's (BP -2.0%) Alligin development, located west of Shetland. The field, which is jointly owned with Royal Dutch Shell (RDS.A -1.0%), is expected to produce 12,000 barrels boe/day when it comes online in 2020.

Today's M&A activity:

  • EnLink Midstream (ENLC -1.8%) announced an all-stock buyout of its MLP, EnLink Midstream Partners (ENLK -0.9%). ENLK shareholders will receive 1.15 units of ENLC for each share they own. The company says the move will simplify its corporate structure. The transaction is expected to close in Q1/2019.

  • Jacobs Engineering (JEC +6.8%) has agreed to sell its entire energy, chemicals and resources business to Australia's WorleyParsons for US$3.3 billion. The deal is structured US$2.6 billion in cash and US$700 million in shares, giving Jacobs an 11% stake in WorleyParsons. The deal has been approved by both boards and is expected to close in the first half of 2019.

  • Private-equity firm Blackstone Group (BX -0.9%) has agreed to acquire Ulterra Drilling Technologies for US$700 million. The Texas-based company is the fifth-largest manufacturer of drill bits and downhole tools for the oil and gas sector.

  • Weatherford International (WFT -1.6%) has agreed to sell its laboratory services business to CSL Capital Management for US$205 million in cash. The sale also includes Weatherford's geological analysis business along will all of the division's staff and contracts.

Today's notable third quarter earnings:

  • Halliburton (HAL -3.1%) posted a net profit of US$434 million in Q3, up 20% from the same quarter last year. As also noted by Schlumberger (SLB -2.9%) last week, the company says limited pipeline capacity out of the Permian led to fewer well completions this past quarter, but calls the bottlenecks "temporary." Total revenues rose 13% y/y to US$6.2 billion. The company also warned Q4 earnings will likely be below consensus estimates.

OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$79.83▲0.156.25
 
86.29
WTI$69.17▲0.150.60
 
76.41
CDN LT$41.17▼6.741.17
 
69.32
C5+$58.92▲0.152.43
 
71.40
WCS$25.17▲1.224.87
 
56.21
CRUDE OIL FUTURES CURVES
BRENT
WTI
█ OCT 22   █ OCT 15   █ OCT 8   █ OCT 1   (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
  • Altagas (ALA +2.4%)
  • Enerflex (EFX +1.3%)
  • Advantage O&G (AAV +1.2%)
  • Cenovus Energy (CVE +1.1%)
  • Mullen Group (MTL +1%)
  • 12-MO HIGHS
  • None
  • 10-YR HIGHS
  • None
  • GOLDEN CROSSES
  • None
  • TSX BEARISH INDICATORS
    BOTTOM
    5
  • Crescent Point (CPG -3.2%)
  • Trican Well (TCW -3.1%)
  • Baytex Energy (BTE -2.7%)
  • Precision Drilling (PD -2.7%)
  • Paramount Res (POU -2.2%)
  • 12-MO LOWS
  • CES Energy Solutions (CEU -1.9%)
  • Crescent Point (CPG -3.2%)
  • Nuvista Energy (NVA -1.9%)
  • Paramount Res (POU -2.2%)
  • Trican Well (TCW -3.1%)
  • Vermilion Energy (VET +0.7%)
  • 10-YR LOWS
  • Crescent Point (CPG -3.2%)
  • DEATH CROSSES
  • None
  • COMPANY TICKER CLOSE %CHG L 52WK H RANK  CHARTS
    INTEGRATED
    SuncorSU46.45▼-0.940.49
     
    55.4729D   W
    Imperial OilIMO43.83▲0.133.43
     
    44.9194D   W
    Husky EnergyHSE20.04▼-0.215.09
     
    22.9973D   W
    MIDSTREAM
    EnbridgeENB42.19▼-1.637.36
     
    51.0470D   W
    TransCanadaTRP52.73▼-1.350.28
     
    65.1848D   W
    Pembina PipelinePPL44.87▲0.137.60
     
    47.8490D   W
    Inter PipelineIPL22.46▼-0.121.36
     
    27.9252D   W
    Keyera KEY35.04▲0.431.20
     
    38.9177D   W
    Gibson EnergyGEI22.30▼-1.815.68
     
    23.0498D   W
    LARGE CAP E&P
    Cdn Natural ResCNQ37.46▲0.836.47
     
    49.0813D   W
    EncanaECA14.72▲0.112.37
     
    18.5420D   W
    Cenovus EnergyCVE11.27▲1.19.03
     
    14.8423D   W
    TourmalineTOU19.80▼-0.717.78
     
    27.2615D   W
    Seven GenerationsVII14.40▼-0.313.62
     
    21.2515D   W
    SERVICES
    ShawcorSCL24.14▼-0.923.22
     
    29.5029D   W
    Pason SystemsPSI19.98▼-0.816.05
     
    22.1087D   W
    Mullen Group MTL15.36▲1.014.10
     
    17.1281D   W
    EnerflexEFX17.00▲1.313.55
     
    17.8293D   W
    Secure EnergySES8.02▲0.56.98
     
    9.8261D   W
    REFINING & MARKETING
    Parkland FuelPKI45.06▼-1.823.41
     
    47.4599D   W
    S&P 500 ENERGY STOCKS
    SPX BULLISH INDICATORS
    TOP 5
  • HollyFrontier (HFC +2.6%)
  • Phillips 66 (PSX +0.4%)
  • Marathon Petroleum (MPC +0.3%)
  • Baker Hughes (BHGE +0.2%)
  • Occidental Petroleum (OXY +0.2%)
  • 12-MO HIGHS
  • None
  • 10-YR HIGHS
  • None
  • GOLDEN CROSSES
  • None
  • SPX BEARISH INDICATORS
    BOTTOM
    5
  • EQT Corp (EQT -4.2%)
  • Cabot Oil & Gas (COG -3.4%)
  • Anadarko Petroleum (APC -3.1%)
  • Halliburton (HAL -3.1%)
  • Newfield Exploration (NFX -3%)
  • 12-MO LOWS
  • Schlumberger (SLB -2.9%)
  • 10-YR LOWS
  • None
  • DEATH CROSSES
  • None
  • COMPANY TICKER CLOSE %CHG L 52WK H RANK  CHARTS
    INTEGRATED
    Exxon MobilXOM81.15▼-1.072.16
     
    89.3061D   W
    ChevronCVX117.21▼-0.8108.02
     
    133.8849D   W
    MIDSTREAM
    Kinder MorganKMI17.44▼-3.014.69
     
    19.8367D   W
    Williams CoWMB26.28▼-1.724.00
     
    33.6749D   W
    ONEOKOKE66.98▼-1.249.65
     
    71.9980D   W
    LARGE CAP E&P
    ConocoPhillipsCOP72.05▼-0.648.97
     
    80.2477D   W
    EOG ResourcesEOG116.25▼-1.295.42
     
    133.5351↓D   W
    Occidental PetroleumOXY72.29▲0.262.47
     
    87.6735D   W
    Anadarko PetroleumAPC63.93▼-3.146.75
     
    76.7047D   W
    Concho ResourcesCXO146.84▼-0.5123.63
     
    163.1157D   W
    SERVICES
    SchlumbergerSLB56.81▼-2.956.17
     
    80.3517D   W
    HalliburtonHAL36.40▼-3.135.75
     
    57.865D   W
    National-Oilwell VarcoNOV40.27▼-0.331.47
     
    49.0850↓D   W
    TechnipFMCFTI28.73▼-2.124.53
     
    35.0026D   W
    Baker HughesBHGE29.99▲0.225.53
     
    37.7623D   W
    REFINERS
    Phillips 66PSX103.15▲0.489.14
     
    123.9735D   W
    Valero EnergyVLO92.85▲0.175.84
     
    126.9811D   W
    Marathon PetroleumMPC74.13▲0.355.87
     
    88.4534D   W
    HollyFrontierHFC64.80▲2.635.62
     
    83.2867D   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.A64.90▼-1.060.62
     
    73.8646D   W
    TotalTOT59.80▼-1.753.37
     
    65.6949D   W
    BPBP43.14▼-2.036.15
     
    47.8355↓D   W
    EniE34.96▼-1.531.58
     
    40.1538D   W
    EquinorEQNR26.38▼-2.219.74
     
    28.9371D   W
    ANALYST RATINGS

    UPGRADES

    • Cenovus Energy (CVE.TO): Upgraded from Hold to Buy at TD Securities.

    • Occidental Petroleum (OXY): Upgraded from Outperform to Strong Buy at Raymond James.

    • Suncor Energy (SU.TO): Upgraded from Neutral to Buy at GARP Research.

    DOWNGRADES

    • Crescent Point Energy (CPG.TO): Downgraded from Outperform to Market Perform at BMO.


    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 breaks below US$20 as markets continue to sell-off

    WCS breaks below US$20 as markets continue to sell-off

    WCS returns to lows of early 2016 as differential widens

    WCS returns to lows of early 2016 as differential widens

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