Oil prices rebound as Hurricane Michael takes more GoM production offline
Today’s energy market action:
Hurricane Michael continues to wreck havoc in the Gulf of Mexico, taking 40% of the region's oil production offline. According to the BSEE, 75 platforms were evacuated in the past few days, shutting in 670,000 bbl/day of oil and 726 MMcf/day of natural gas.
The IEA urged OPEC to boost production, warning that higher oil prices may trigger a sharp slowdown in emerging markets, putting the global economy at risk.
The US and Canadian energy sectors diverged again today, as the TSX energy basket sank almost 0.5% while SPX energy components rose 1%. Energy services stocks posted the nicest gains in Canada, while independent refiners dragged the US sector lower.
Today's midstream action:
Ratings agency Moody's warns that TransCanada (TRP -1.6%) is at risk of being downgraded, due to its recent sanction of the $6.2 billion Coastal GasLine project. The firm says the negative revision could be alleviated if the company finds a joint-venture partner.
Antero Midstream Partners (AM +14.1%) has agreed to be acquired by Antero Midstream (AMGP +9.2%). AM shareholders will receive US$3.415 in cash and 1.635 shares of the new Antero Midstream Corp stock.
Williams Co (WMB -0.2%) announced binding, 15-year commitments from Seneca Resources and Cabot Oil & Gas (COG +0.3%) for 100% of transport capacity on its proposed Leidy South expansion of the Transco interstate pipeline. The company says it has commenced preliminary planning activities for the expansion. Seneca is a subsidiary of National Fuel Gas Company (NFG +0.8%).
Other notable market movers:
Shale oil producer EOG Resources (EOG +1.9%) warned of a pending hedging loss of $52 million in the third quarter.
Devon Energy (DVN +1.9%) filed for US$3 billion in revolving credit, with up to US$500 million dedicated to its Canadian operations. The company says the funds will be used for general accounting purposes.
Goldman Sachs cut price targets for Occidental Petroleum (OXY +0.6%), Murphy Oil (MUR -0.1%), Continental Resources (CLR -0.5%), EP Energy (EPE +0%), Devon Energy (DVN +1.9%) and Cabot Oil & Gas (COG +0.3%), and increased targets for Apache (APA +2.7%), Concho Resources (CXO +2.3%) and Range Resources (RRC +3.2%). The investment firm says is expects E&P stocks to do better than forecasted, if spending is kept under control.
|CURRENCIES & YIELDS|
TSX ENERGY SUB-SECTORS|
SPX ENERGY SUB-SECTORS|
|Imperial Oil||IMO||44.11||▲1.2||33.43||44.91||94↑||D W|
|Husky Energy||HSE||21.04||▲0.3||15.09||22.99||88||D W|
|Pembina Pipeline||PPL||45.28||▼-0.3||37.60||47.84||90||D W|
|Inter Pipeline||IPL||22.29||▼-0.5||21.36||27.92||31||D W|
|Gibson Energy||GEI||21.50||▲0.1||15.68||21.64||97↑||D W|
|LARGE CAP E&P|
|Cdn Natural Res||CNQ||40.34||▼-2.4||36.88||49.08||24||D W|
|Cenovus Energy||CVE||12.86||▼-1.5||9.03||14.84||79||D W|
|Seven Generations||VII||16.45||▲1.4||13.62||21.25||77↑||D W|
|Pason Systems||PSI||20.83||▲1.1||16.05||22.10||90↑||D W|
|Mullen Group||MTL||15.56||▲0.9||14.10||17.12||73||D W|
|Secure Energy||SES||8.67||▲2.7||6.98||9.82||91||D W|
|REFINING & MARKETING|
|Parkland Fuel||PKI||42.19||▼-0.5||23.41||43.93||97↓||D W|
|Exxon Mobil||XOM||86.51||▲0.4||72.16||89.30||82||D W|
|Kinder Morgan||KMI||18.57||▲2.0||14.69||19.83||89||D W|
|Williams Co||WMB||27.63||▼-0.2||24.00||33.67||52||D W|
|LARGE CAP E&P|
|EOG Resources||EOG||132.35||▲1.9||95.36||133.53||95||D W|
|Occidental Petroleum||OXY||82.23||▲0.6||62.47||87.67||83||D W|
|Anadarko Petroleum||APC||70.61||▲1.9||46.75||76.70||90↑||D W|
|Concho Resources||CXO||159.96||▲2.2||123.63||163.11||91↑||D W|
|National-Oilwell Varco||NOV||45.45||▲2.5||31.47||49.08||78||D W|
|Baker Hughes||BHGE||32.63||▲2.3||25.53||37.76||43||D W|
|Phillips 66||PSX||117.68||▼-0.4||89.14||123.97||83||D W|
|Valero Energy||VLO||115.66||▼-0.5||75.84||126.98||79||D W|
|Marathon Petroleum||MPC||83.76||▼-0.1||55.68||88.45||82||D W|
Canadian Natural Resources (CNQ.TO): Downgraded from Outperform to Neutral at Macquarie.
Continental Resources (CLR): Downgraded from Outperform to Market Perform at BMO.
Delek US (DK): Downgraded from Conviction Buy to Buy at Goldman Sachs.
PetroChina (PTR): Downgraded from Outperform to Neutral at Macquarie.
Source Energy Services (SHLE.TO): Downgraded from Buy to Hold at GMP Securities.
UPDATED: DAILY (END-OF-DAY)
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• FALLING RANK (↓) REFLECTS DECREASING RELATIVE STRENGTH.