WCS breaks below US$20 as markets continue to sell-off
Today's energy market summary:
The American Petroleum Institute (API) is forecasting a 9.88 million barrel build in crude stockpiles. Official numbers from the Energy Information Administration (EIA) are due tomorrow morning.
The discount on WCS widened another US$3 on Tuesday, to an all-time high of US$47, bringing the price of Canada's benchmark heavy crude to below US$20 a barrel.
Global markets sold off again today, as several Dow Industrial components warned import tariffs have started to bite into earnings. European and Japanese markets also sank overnight, as did Hong Kong and Shanghai indices due to ongoing concerns over the health of the Chinese consumer.
Today's notable market movers:
In a filing with federal regulators, Energy Transfer Partners (ETP n/c) says its Mariner East 2 pipeline is expected to start around November 1. The 275,000 bbl/day line will transport propane and butane from Ohio to Pennsylvania.
Sempra Energy (SRE -1.2%) subsidiary IEnova signed a long-term contract with Marathon Petroleum (MPC -2.8%) for 50% of capacity on its 1 million barrel fuels marine terminal in Sinaloa, Mexico. The terminal is expected to begin commercial operations at the end of 2020.
Phillips 66 (PSX -3.3%) was awarded a tender to supply Mexico's Pemex with at least 1.4 million barrels of light Bakken crude in November. This is Pemex's first crude import in over a decade. The crude is destined for the Salina Cruz refinery, which faces dwindling domestic supply.
Russia's Rosneft and ExxonMobil (XOM -1.6%) are reportedly working on a US$15 billion Russian LNG terminal, in partnership with Japan's SODECO and India's ONGC Videsh. The gas will likely be supplied by Sakhalin-1, which is owned by the same four partners.
TechnipFMC (FTI -2.0%) announced a contract with ExxonMobil (XOM -1.6%) for engineering of the subsea system for the proposed Liza Phase II project offshore Guyana on the Stabroek Block.
Transocean (RIG -5.4%) announced a US$750 million offering of 7.25% senior unsecured notes due in 2025. Net proceeds will be used to pay for its merger with Ocean Rig (ORIG -3.2%).
Today's M&A activity:
Enable Midstream Partners (ENBL -1.8%) has agreed to acquire midstream player Velocity Holdings for US$442 million. The company also signed a new contract for the expansion of its crude and water gathering systems in the Williston Basin.
Today's notable third quarter earnings and analyst action:
CN Rail (CNR.TO -2.9%) reported Q3 revenues of $3.69 billion, up 14% y/y. Revenues from the transport of petroleum and chemicals rose 25% for the quarter to $665 million.
Range Resources (RRC -1.4%) reported a net income of US$48.5 million in Q3. Production averaged 2.27 Bcfe/day, a new record high and 14% increase y/y.
Piper Jaffray says now is a good time to plow into energy stocks, particularly integrated names. The firm named Chevron (CVX -3.3%) as a top pick, while BP (BP -2.0%), Total (TOT -1.5%) and Equinor (EQNR -2.7%) were rated as Overweight.
|CURRENCIES & YIELDS|
|Imperial Oil||IMO||42.77||▼-2.4||33.43||44.91||93||D W|
|Husky Energy||HSE||19.64||▼-2.0||15.09||22.99||55||D W|
|Pembina Pipeline||PPL||45.23||▲0.8||37.60||47.84||93||D W|
|Inter Pipeline||IPL||22.40||▼-0.3||21.36||27.92||59↑||D W|
|Gibson Energy||GEI||21.79||▼-2.3||15.68||23.04||98||D W|
|LARGE CAP E&P|
|Cdn Natural Res||CNQ||36.81||▼-1.7||36.08||49.08||12||D W|
|Cenovus Energy||CVE||11.16||▼-1.0||9.03||14.84||23||D W|
|Seven Generations||VII||14.19||▼-1.5||13.51||21.25||13||D W|
|Pason Systems||PSI||19.69||▼-1.5||16.05||22.10||84||D W|
|Mullen Group||MTL||15.30||▼-0.4||14.10||17.12||80||D W|
|Secure Energy||SES||8.06||▲0.5||6.98||9.82||60||D W|
|REFINING & MARKETING|
|Parkland Fuel||PKI||43.85||▼-2.7||23.70||47.45||98||D W|
|Exxon Mobil||XOM||79.84||▼-1.6||72.16||89.30||53||D W|
|Kinder Morgan||KMI||17.04||▼-2.3||14.69||19.83||60||D W|
|Williams Co||WMB||25.90||▼-1.5||24.00||33.67||48||D W|
|LARGE CAP E&P|
|EOG Resources||EOG||111.12||▼-4.4||95.67||133.53||36↓||D W|
|Occidental Petroleum||OXY||70.64||▼-2.3||62.47||87.67||30||D W|
|Anadarko Petroleum||APC||61.84||▼-3.3||46.75||76.70||37||D W|
|Concho Resources||CXO||141.78||▼-3.5||123.63||163.11||44||D W|
|Ntl-Oilwell Varco||NOV||38.82||▼-3.6||31.47||49.08||40↓||D W|
|Baker Hughes||BHGE||28.88||▼-3.7||25.53||37.76||15||D W|
|Phillips 66||PSX||99.80||▼-3.3||89.14||123.97||24||D W|
|Valero Energy||VLO||91.66||▼-1.3||75.84||126.98||9||D W|
|Marathon Petroleum||MPC||72.09||▼-2.8||55.87||88.45||26||D W|
EnLink Midstream Partners (ENLK): Upgraded from Underperform to Neutral at Credit Suisse.
Petrobras (PBR): Upgraded from Equal Weight to Buy at Morgan Stanley.
Andeavor Logitics (ANDX): Downgraded from Outperform to Market Perform at Raymond James.
Liberty Oilfield Services (LBRT): Downgraded from Buy to Neutral at Citigroup.
UPDATED: DAILY (END-OF-DAY)
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