WCS surges 50% as December contract expires
Today's energy market summary:
Canadian crude and condensate benchmark prices all surged today, as futures rolled into the January contract on Friday.
WCS gained almost 50% as the discount to WTI narrowed from US$43 a barrel to US$36.30. The discount on Canadian Light narrowed by almost US$8, while the C5+ discount narrowed by US$4.
Brent and WTI ended the day roughly unchanged, despite a 0.5% drop in the US dollar.
After yesterday's meltdown, Henry Hub rebounded over 5% on Friday.
Equity markets had a very uneventful Friday, with most US indices ending the day flat to slightly higher. In Toronto, the TSX rose 0.1%.
The TSX energy sector posted a 0.5% loss, led lower by large-cap integrated names. Canadian energy services firms ended Friday mostly in the green.
The SPX energy sector posted its second day of solid gains, rising over 1%. Gains were broadly based with all large-cap components ending the day higher.
Today's notable energy news:
Ensign Energy (ESI.TO -0.8%) has advanced the expiry date for its all-cash offer for Trinidad Drilling (TDG.TO -0.6%) to November 27, 2018. Under terms of the deal, Trinidad shareholders are entitled to $1.68 per TDG share. Trinidad is instead recommending investors vote for a merger with Precision Drilling (PD.TO +0.3%). The deal with PD is subject to a $20 million break-up fee, payable by Trinidad, should the merger fall through. A special shareholders meeting is planned for December 11, 2018.
Total (TOT n/c), ExxonMobil (XOM +1.0) and Oil Search announced a new MOU with the government of Papua New Guinea, establishing a framework for its proposed Papua LNG Project. The project will include two LNG trains of 2.7 Mt/y. The partners have agreed to begin engineering studies on the terminal.
Anadarko Petroleum (APC +1.6%) says it has allocated US$200 million for its proposed Mozambique LNG export terminal, in preparation for a final investment decision sometime next year. If the project is sanctioned, first LNG exports are expected by 2023. Capital costs for the 13 Mt/y terminal are estimated to be somewhere between US$8 and US$15 billion.
Today's quarterly earnings:
Driller Helmerich & Payne (HP +4.3%) swung to a profit in the fourth quarter. The company reported a US$2.5 million profit, versus a US$22.5 million loss for the same quarter last year. Revenues rose 31% y/y to US$697 million. For the fiscal year 2018, the company reported a net income of US$483 million on operating revenues of US$2.5 billion.
|CURRENCIES & YIELDS|
|Suncor Energy||SU||43.68||▼-1.1||40.49||55.47||24||D W|
|Imperial Oil||IMO||41.98||▼-0.1||33.43||44.91||73||D W|
|Husky Energy||HSE||17.43||▼-2.4||15.09||22.99||24||D W|
|Pembina Pipeline||PPL||44.60||▲0.7||37.60||47.84||81||D W|
|Inter Pipeline||IPL||22.76||▼-0.1||20.68||27.92||65||D W|
|Gibson Energy||GEI||21.92||▲0.1||15.68||23.32||97↓||D W|
|LARGE CAP E&P|
|Cdn Natural Res||CNQ||35.70||▼-0.1||35.19||49.08||17||D W|
|Cenovus Energy||CVE||10.67||▼-2.5||9.03||14.84||17||D W|
|Seven Generations||VII||12.30||▲1.7||11.57||19.40||9||D W|
|Pason Systems||PSI||21.77||▲1.5||16.05||24.57||93||D W|
|Mullen Group||MTL||13.27||▲1.5||13.02||16.93||24||D W|
|Secure Energy||SES||8.15||▲0.4||6.98||9.82||68||D W|
|REFINING & MARKETING|
|Parkland Fuel||PKI||37.21||▼-0.9||24.97||47.45||80↓||D W|
|Exxon Mobil||XOM||78.96||▲1.0||72.16||89.30||49||D W|
|Kinder Morgan||KMI||17.28||▲0.6||14.69||19.83||66||D W|
|Williams Co||WMB||25.13||▲0.5||23.54||33.67||27||D W|
|LARGE CAP E&P|
|EOG Resources||EOG||105.20||▲3.6||96.54||133.53||21||D W|
|Occidental Petro||OXY||73.38||▲1.1||62.47||87.67||39||D W|
|Anadarko Petro||APC||56.38||▲1.6||46.80||76.70||12||D W|
|Concho Res||CXO||138.39||▲2.8||123.63||163.11||42||D W|
|Ntl-Oilwell Varco||NOV||33.65||▲0.5||31.47||49.08||6||D W|
|Baker Hughes||BHGE||23.37||▲0.4||22.55||37.76||2||D W|
|Phillips 66||PSX||96.61||▲1.2||89.14||123.97||19||D W|
|Valero Energy||VLO||83.95||▲0.8||80.88||126.98||5||D W|
|Marathon Petro||MPC||65.44||▲0.1||60.95||88.45||13||D W|
CNOOC (CEO): Upgraded from Neutral to Buy at UBS Group.
Core Laboratories (CLB): Upgraded from Neutral to Buy at Guggenheim.
EOG Resources (EOG): Upgraded from Neutral to Outperform at Credit Suisse.
Pembina Pipeline (PPL.TO): Upgraded from Neutral to Outperform at Credit Suisse.
Traverse Energy (TVL.V): Downgraded from Hold to Reduce at GMP Securities.
Weatherford International (WFT): Downgraded from Outperform to Market Perform at Raymond James.
UPDATED: DAILY (END-OF-DAY)
• OIL PRICES REFLECT NEAR MONTH CONTRACT FROM THE NYMEX/CME GROUP
• EQUITY PRICES PROVIDED BY NYSE & TMX GROUP
• CHARTPACKS COURTESY STOCKCHARTS.COM (DIVIDEND ADJUSTED)
• 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
• 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.