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

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

Today's energy market summary:

  • Global oil prices slid to a two-month low, as Saudi Arabia reiterated its ability to quickly make up for any lost barrels out of Iran. Both Brent and WTI declined about 4%.

  • 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.

  • Gasoline prices tumbled almost 4%, while heating oil also fell 3%. Natural gas was a rare bright spot for the day, gaining 2.4%.

  • 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.

  • The TSX declined almost 1%, on a 2.4% drop in the Canadian energy sector. Losses were broadly based across all subsectors, with many E&Ps and service names hitting new 52-week lows.

  • The S&P 500 fell 0.6%, with the energy sector posting a 2.7% decline. All large-cap energy components ended the day lower, as did European ADRs listed on the NYSE.

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.

OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$76.44▼4.256.25
 
86.29
WTI$66.43▼4.050.60
 
76.41
CDN LT$38.43▼6.738.43
 
69.32
C5+$56.18▼4.752.43
 
71.40
WCS$19.43▼22.819.43
 
56.21
CRUDE OIL FUTURES CURVES
BRENT
WTI
█ OCT 23   █ OCT 16   █ OCT 9   █ OCT 2   (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
  • Tourmaline (TOU +0.9%)
  • Pembina Pipeline (PPL +0.8%)
  • Secure Energy (SES +0.5%)
  • Enbridge (ENB +0.4%)
  • Enbridge Income Fund (ENF +0.4%)
  • 12-MO HIGHS
  • None
  • 10-YR HIGHS
  • None
  • GOLDEN CROSSES
  • None
  • TSX BEARISH INDICATORS
    BOTTOM
    5
  • Trican Well (TCW -7.6%)
  • Crescent Point (CPG -7.2%)
  • TORC Oil & Gas (TOG -5.4%)
  • Enerplus (ERF -5.4%)
  • Encana (ECA -5.2%)
  • 12-MO LOWS
  • Cdn Natural Res (CNQ -1.7%)
  • Seven Generations (VII -1.5%)
  • Baytex Energy (BTE -5.2%)
  • CES Energy Solutions (CEU -0.3%)
  • Crescent Point (CPG -7.2%)
  • Ensign Energy Services (ESI -3%)
  • Freehold Royalties (FRU -1.4%)
  • Kelt Exploration (KEL -4.6%)
  • Nuvista Energy (NVA -4.6%)
  • Paramount Resources (POU -4.7%)
  • Trican Well (TCW -7.6%)
  • TORC Oil & Gas (TOG -5.4%)
  • Vermilion Energy (VET -0.9%)
  • Whitecap Resources (WCP -2.8%)
  • 10-YR LOWS
  • Crescent Point (CPG -7.2%)
  • DEATH CROSSES
  • None
  • COMPANY TICKER CLOSE %CHG L 52WK H RANK  CHARTS
    INTEGRATED
    SuncorSU45.19▼-2.740.49
     
    55.4723D   W
    Imperial OilIMO42.77▼-2.433.43
     
    44.9193D   W
    Husky EnergyHSE19.64▼-2.015.09
     
    22.9955D   W
    MIDSTREAM
    EnbridgeENB42.36▲0.437.36
     
    51.0485D   W
    TransCanadaTRP51.25▼-2.850.28
     
    65.1835D   W
    Pembina PipelinePPL45.23▲0.837.60
     
    47.8493D   W
    Inter PipelineIPL22.40▼-0.321.36
     
    27.9259↑D   W
    Keyera KEY34.17▼-2.531.20
     
    38.9158D   W
    Gibson EnergyGEI21.79▼-2.315.68
     
    23.0498D   W
    LARGE CAP E&P
    Cdn Natural ResCNQ36.81▼-1.736.08
     
    49.0812D   W
    EncanaECA13.95▼-5.212.37
     
    18.5413D   W
    Cenovus EnergyCVE11.16▼-1.09.03
     
    14.8423D   W
    TourmalineTOU19.98▲0.917.78
     
    27.2617D   W
    Seven GenerationsVII14.19▼-1.513.51
     
    21.2513D   W
    SERVICES
    ShawcorSCL23.96▼-0.823.22
     
    29.5034D   W
    Pason SystemsPSI19.69▼-1.516.05
     
    22.1084D   W
    Mullen Group MTL15.30▼-0.414.10
     
    17.1280D   W
    EnerflexEFX16.62▼-2.213.55
     
    17.8290D   W
    Secure EnergySES8.06▲0.56.98
     
    9.8260D   W
    REFINING & MARKETING
    Parkland FuelPKI43.85▼-2.723.70
     
    47.4598D   W
    S&P 500 ENERGY STOCKS
    SPX BULLISH INDICATORS
    TOP 5
  • None
  • 12-MO HIGHS
  • None
  • 10-YR HIGHS
  • None
  • GOLDEN CROSSES
  • None
  • SPX BEARISH INDICATORS
    BOTTOM
    5
  • Marathon Oil (MRO -4.7%)
  • EQT Corp (EQT -4.4%)
  • EOG Resources (EOG -4.4%)
  • ConocoPhillips (COP -3.9%)
  • Helmerich & Payne (HP -3.8%)
  • 12-MO LOWS
  • Schlumberger (SLB -3%)
  • Halliburton (HAL -2.1%)
  • EQT Corp (EQT -4.4%)
  • 10-YR LOWS
  • None
  • DEATH CROSSES
  • None
  • COMPANY TICKER CLOSE %CHG L 52WK H RANK  CHARTS
    INTEGRATED
    Exxon MobilXOM79.84▼-1.672.16
     
    89.3053D   W
    ChevronCVX113.40▼-3.3108.02
     
    133.8838D   W
    MIDSTREAM
    Kinder MorganKMI17.04▼-2.314.69
     
    19.8360D   W
    Williams CoWMB25.90▼-1.524.00
     
    33.6748D   W
    ONEOKOKE65.90▼-1.649.65
     
    71.9976D   W
    LARGE CAP E&P
    ConocoPhillipsCOP69.22▼-3.948.97
     
    80.2460D   W
    EOG ResourcesEOG111.12▼-4.495.67
     
    133.5336↓D   W
    Occidental PetroleumOXY70.64▼-2.362.47
     
    87.6730D   W
    Anadarko PetroleumAPC61.84▼-3.346.75
     
    76.7037D   W
    Concho ResourcesCXO141.78▼-3.5123.63
     
    163.1144D   W
    SERVICES
    SchlumbergerSLB55.09▼-3.054.48
     
    80.3511D   W
    HalliburtonHAL35.60▼-2.134.63
     
    57.863D   W
    Ntl-Oilwell VarcoNOV38.82▼-3.631.47
     
    49.0840↓D   W
    TechnipFMCFTI28.17▼-2.024.83
     
    35.0022D   W
    Baker HughesBHGE28.88▼-3.725.53
     
    37.7615D   W
    REFINERS
    Phillips 66PSX99.80▼-3.389.14
     
    123.9724D   W
    Valero EnergyVLO91.66▼-1.375.84
     
    126.989D   W
    Marathon PetroleumMPC72.09▼-2.855.87
     
    88.4526D   W
    HollyFrontierHFC64.41▼-0.635.62
     
    83.2863D   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.A63.11▼-2.860.62
     
    73.8639D   W
    TotalTOT58.92▼-1.553.37
     
    65.6945D   W
    BPBP42.30▼-2.036.15
     
    47.8347↓D   W
    EniE34.42▼-1.531.58
     
    40.1534D   W
    EquinorEQNR25.66▼-2.719.74
     
    28.9355D   W
    ANALYST RATINGS

    UPGRADES

    • EnLink Midstream Partners (ENLK): Upgraded from Underperform to Neutral at Credit Suisse.

    • Petrobras (PBR): Upgraded from Equal Weight to Buy at Morgan Stanley.

    DOWNGRADES

    • 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)

    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.
    Oil prices stabilize but energy stocks continue downward slide

    Oil prices stabilize but energy stocks continue downward slide

    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

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