TSX energy stocks sink lower despite major improvement in Canadian crude discounts

TSX energy stocks sink lower despite major improvement in Canadian crude discounts

Today's energy market summary:

  • Brent hit a fresh yearly low on Friday, falling another 1.3%. WTI also declined 1% to about US$51 a barrel. For the month of November, both Brent and WTI posted a loss of 22%.

  • Gasoline declined another 2% on Friday, also down about 20% for the month.

  • The discount on Canadian Light narrowed by over US$2, while the WCS discount narrowed by US$1.50. The shrinking differentials helped Canada's light and heavy benchmarks rise about 7% and 5%, respectively. WCS ended November up 0.5% m/m, as the differential to WTI narrowed by US$14.50/bbl.

  • OPEC's advisory committee is poised to recommend a 1.3 million bbl/day output cut in 2019, as measured from October 2018 production volumes. That's more than the initial call of a 1 million barrel cut, but less than the previous forecast for a 1.4 million barrel reduction.

  • After falling by three last week, Baker Hughes says the US put two of those oil rigs back into service this week, rising to a total of 887. Canada lost 5 oil rigs, falling to 119.

Today's equity market action:

  • Stock markets in the US and China posted small gains on Friday, while European markets were flat to lower overnight. In Toronto, the TSX also ended the day unchanged.

  • Energy was once again the worst performing sector on both sides of the border, falling 0.9% on the TSX and 0.2% on the SPX.

  • Declines were broadly based in Canada, with many more producers hitting new multi-year lows. Losses in US markets were focused among producers and service firms. Independent refiners were the best performers in energy markets on Friday.

  • Despite a decline in US bond yields, the US dollar gained another 0.5%, inching closer to its most recent highs. 

Today's notable energy news:

  • Inter Pipeline (IPL.TO -1.1%) has closed on its acquisition of NuStar Energy's (NS -0.1%) European bulk liquid storage business for US$270 million in cash. The acquisition adds 9.1 million barrels of storage, bringing IPL's total capacity to about 37 million barrels. The deal was funded through the issuance of $200 million in shares and the company's revolving credit facility.

  • Vermilion Energy (VET.TO -1.9%) says it has now taken ownership of the Corrib Natural Gas Project in Ireland. Royal Dutch Shell (RDS.A -0.3%), who was the previous operator, sold its 45% stake to a subsidiary of the Canada Pension Plan Investment Board (CPPIB). The CPPIB agreed to transfer the asset, along with a 1.5% working interest, to Vermilion, after which Vermilion will hold a 20% operated interest. The deal adds 700 boe/day of net natural gas production to VET.

  • Bellatrix Exploration (BXE.TO -4.8%) also closed on its recent acquisition of assets from Daewoo, located in the Ferrier area of west central Alberta, which produce about 1,250 boe/day (weighted 35% liquids). The deal was funded through $1.75 million in cash and the issuance of 6.75 million BXE shares. The company also renewed and extended its $100 million revolving credit facility.

  • Husky Energy (HSE.TO +3.1%) announced the appointment of Jeff Hart as its new CFO. Hart has been with Husky since 2010, previously serving as VP, Controller.

  • Denver-based Crimson Midstream and MPLX (MPLX +0.3%) have extended binding Open Season on their Swordfish Pipeline, which connects existing terminal facilities in Louisiana to the Louisiana Offshore Oil Port (LOOP) vessel loading terminal. The pipeline has a capacity of up to 600,000 bbl/day. The line is expected to be in-service in the first half of 2020. MPLX is the MLP arm of Marathon Petroleum Corp (MPC +0.4%).

  • Equitrans Midstream (ETRN -3.0%) announced the purchase EQGP Holdings (EQGP +17.6%) for US$20 per share in cash, a 17.5% premium to EQGP's previous day's closing price. After the deal closes, ETRN will own more than 95% of EQGP’s common shares.

  • Total (TOT +0.5%) restarted its 253,000 bbl/day Normandy refinery after workers suspended a week-long strike. More talks between the company and the union are scheduled for December 11.

  • Royal Dutch Shell (RDS.A -0.3%) closed on its previously-announced divestiture of upstream operations in Ireland for up to US$1.3 billion. Shell also completed the sale of several fields in Norway for US$526 million. The sales are all part of the company's US$30 billion divestment plan, aimed at high-grading and simplifying its portfolio.

OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$58.71▼1.358.71
 
86.29
WTI$50.93▼1.050.29
 
76.41
CDN LT$27.93▲6.620.83
 
69.32
C5+$38.63▲0.937.04
 
71.40
WCS$22.43▲4.612.59
 
56.21
CRUDE OIL FUTURES CURVES
BRENT
WTI
█ NOV 30   █ NOV 23   █ NOV 16   █ NOV 9   (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 +3.2%)
  • Husky Energy (HSE +3.1%)
  • CES Energy (CEU +2.6%)
  • PrairieSky (PSK +2.5%)
  • Gran Tierra (GTE +2.3%)
  • 12-MO HIGHS
  • None
  • 10-YR HIGHS
  • None
  • GOLDEN CROSSES
  • None
  • TSX BEARISH INDICATORS
    BOTTOM
    5
  • Trican Well Svc (TCW -9%)
  • Advantage O&G (AAV -7%)
  • Shawcor (SCL -4.4%)
  • Nuvista Energy (NVA -3.7%)
  • TORC O&G (TOG -3.4%)
  • 12-MO LOWS
  • Encana (ECA -3.2%)
  • Tourmaline (TOU +0.6%)
  • Mullen Group (MTL +0.7%)
  • Advantage O&G (AAV -7%)
  • Crescent Point (CPG -2.2%)
  • Freehold Royalties (FRU -1.2%)
  • Kelt Exploration (KEL -2.5%)
  • Precision Drilling (PD -1%)
  • Paramount Res (POU -0.7%)
  • PrairieSky (PSK +2.5%)
  • Parex Resources (PXT +0.9%)
  • Trican Well Svc (TCW -9%)
  • Whitecap Res (WCP -0.6%)
  • 10-YR LOWS
  • Tourmaline (TOU +0.6%)
  • Advantage O&G (AAV -7%)
  • Crescent Point (CPG -2.2%)
  • DEATH CROSSES
  • None
  • COMPANY TICKER CLOSE %CHG L 52WK H RANK  CHARTS
    INTEGRATED
    Suncor EnergySU42.84▼-0.840.49
     
    55.4724D   W
    Imperial OilIMO39.57▼-2.033.43
     
    44.9140D   W
    Husky EnergyHSE16.50▲3.115.29
     
    22.9924D   W
    MIDSTREAM
    EnbridgeENB43.66▼-0.737.36
     
    51.0490D   W
    TransCanadaTRP54.45▲0.148.92
     
    63.2982D   W
    Pembina PipelinePPL44.80▲1.137.60
     
    47.8482D   W
    Inter PipelineIPL21.36▼-1.120.68
     
    27.9234D   W
    Keyera KEY29.10▲1.627.85
     
    38.9120D   W
    Gibson EnergyGEI21.350.015.68
     
    23.3297D   W
    LARGE CAP E&P
    Cdn Natural ResCNQ33.39▼-0.232.08
     
    49.0814D   W
    EncanaECA8.95▼-3.28.86
     
    18.543D   W
    Cenovus EnergyCVE9.82▲0.79.03
     
    14.8416D   W
    TourmalineTOU18.40▲0.617.73
     
    26.1917D   W
    Seven GenerationsVII10.13▼-0.69.69
     
    19.404D   W
    SERVICES
    ShawcorSCL19.53▼-4.418.72
     
    29.5011D   W
    Pason SystemsPSI19.93▲0.416.05
     
    24.5758D   W
    Mullen Group MTL12.30▲0.712.04
     
    16.9319D   W
    EnerflexEFX16.31▼-0.513.55
     
    18.7287D   W
    Secure EnergySES7.20▼-1.26.98
     
    9.8225↓D   W
    REFINING & MARKETING
    Parkland FuelPKI39.14▲0.425.11
     
    47.4594D   W
    S&P 500 ENERGY STOCKS
    SPX BULLISH INDICATORS
    TOP 5
  • Cabot O&G (COG +1.9%)
  • HollyFrontier (HFC +1.3%)
  • Kinder Morgan (KMI +1.2%)
  • Phillips 66 (PSX +0.9%)
  • Marathon Oil (MRO +0.9%)
  • 12-MO HIGHS
  • None
  • 10-YR HIGHS
  • None
  • GOLDEN CROSSES
  • None
  • SPX BEARISH INDICATORS
    BOTTOM
    5
  • Newfield Expl (NFX -3.4%)
  • TechnipFMC (FTI -2.5%)
  • Noble Energy (NBL -2.2%)
  • EOG Resources (EOG -2.1%)
  • Cimarex Energy (XEC -1.9%)
  • 12-MO LOWS
  • Schlumberger (SLB -1.7%)
  • 10-YR LOWS
  • None
  • DEATH CROSSES
  • None
  • COMPANY TICKER CLOSE %CHG L 52WK H RANK  CHARTS
    INTEGRATED
    Exxon MobilXOM79.50▲0.672.16
     
    89.3053D   W
    ChevronCVX118.94▲0.1107.54
     
    133.8859D   W
    MIDSTREAM
    Kinder MorganKMI17.07▲1.114.69
     
    19.8354D   W
    Williams CoWMB25.32▼-0.923.54
     
    33.6738D   W
    ONEOKOKE61.43▲0.250.63
     
    71.9933D   W
    LARGE CAP E&P
    ConocoPhillipsCOP66.18▼-1.050.08
     
    80.2444D   W
    EOG ResourcesEOG103.31▼-2.196.54
     
    133.5322D   W
    Occidental PetroOXY70.27▼-0.962.47
     
    87.6723D   W
    Anadarko PetroAPC52.90▼-1.546.80
     
    76.709D   W
    Concho ResCXO130.34▼-0.9123.63
     
    163.1136D   W
    SERVICES
    SchlumbergerSLB45.10▼-1.744.68
     
    80.352D   W
    HalliburtonHAL31.43▼-1.430.47
     
    57.863D   W
    Ntl-Oilwell VarcoNOV32.11▼-1.931.30
     
    49.085D   W
    TechnipFMCFTI23.09▼-2.522.39
     
    35.005D   W
    Baker HughesBHGE22.82▼-1.321.67
     
    37.763D   W
    REFINERS
    Phillips 66PSX93.52▲0.988.99
     
    123.9712D   W
    Valero EnergyVLO79.90▲0.576.25
     
    126.983D   W
    Marathon PetroMPC65.16▲0.460.64
     
    88.4514D   W
    HollyFrontierHFC62.47▲1.342.42
     
    83.2824D   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.A60.40▼-0.358.55
     
    73.8612D   W
    TotalTOT55.61▲0.553.37
     
    65.6931D   W
    BPBP40.35▼-0.336.15
     
    47.8330↓D   W
    EniE32.25▼-0.731.72
     
    40.1521D   W
    EquinorEQNR23.38▼-0.619.91
     
    28.9324D   W
    ANALYST RATINGS

    UPGRADES

    • None

    DOWNGRADES

    • Delek US (DK): Downgraded from Buy to Hold at Tudor Pickering.

    • Denbury Resources (DNR): Downgraded from Outperform to Hold at Oppenheimer.


    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.
    Canadian crude prices surge after Alberta government meddles with oil markets

    Canadian crude prices surge after Alberta government meddles with oil markets

    WCS jumps almost 25% as Midwest refineries come back online

    WCS jumps almost 25% as Midwest refineries come back online

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