Canadian oil prices rebound as differentials start to ease

Canadian oil prices rebound as differentials start to ease

Today's energy market summary:

  • Despite the reinstatement of sanctions on Iranian crude exports, world oil prices were relatively indifferent to the news, due in part to exemptions granted to China, India, South Korea, Japan, Italy, Greece, Taiwan and Turkey. Brent posted a 0.5% gain while WTI was roughly unchanged for the day.

  • Differentials on Canadian crudes and condensate showed signs of easing on Monday, resulting in a small bounce in Canadian Light, WCS and C5+ prices. Henry Hub also shot up almost 9% today.

  • Most North American markets posted small gains for the day, with the TSX rising 0.7% and the S&P 500 gaining 0.6%. The US dollar gave back all of last week's gains as bond yields moved lower on both sides of the border.

  • Canadian and US energy sectors rose about 2% on Monday, with gains seen across all subsectors. 

  • Higher Brent prices and a weaker greenback also helped boost European ADRs on the NYSE.

Today's notable energy news:

  • Husky Energy (HSE.TO +2.4%) reminded MEG Energy (MEG +0.9%) shareholders that its $6.4 billion offer is "full and fair." Husky CEO Rob Peabody points out that MEG was cash-flow negative in Q3, due to its high debt load and lack of downstream operations. Peabody says the company "cannot grow its way out of its problems" and recommends MEG shareholders tender their shares to Husky.

  • Valero Energy (VLO -0.7%) announced plans to expand its Diamond Green Diesel plant in Louisiana, boosting renewable diesel production to 675 million gallons annually. The facility is owned jointly with Darling Ingredients (DAR -1.6%). The expansion has a capital cost of US$1.1 billion and an in-service date of 2021.

  • Magellan Midstream Partners (MMP +2.7%) and Navigator Energy Services announced open season on its proposed Voyager pipeline, which would run 500 miles from Cushing to MMP's terminal in East Houston. The pipeline is expected to have an initial capacity of at least 250,000 bbl/day with the ability to expand if there's sufficient demand.

  • SandRidge Energy (SD +3.8%) announced the sale of its oil and gas properties in the Central Basin Platform region of the Permian Basin to an unspecified buyer for US$14.5 million. The divested assets produced  3,775 boe/day in September.

  • French energy major Total (TOT +2.0%) and Sempra Energy (SRE +3.2%) signed an agreement to jointly develop a number of LNG export terminals throughout North America, including Louisiana and Mexico's Baja California. Total retains the right to potentially purchase up to 9 million t/y of LNG from Sempra's terminals on the US Gulf Coast and West Coast.

  • China's Sinopec (SNP +3.8%) and China National Petroleum have agreed to accelerate drilling and exploration from unconventional reserves in the country’s western regions. The move is in an effort to reduce reliance on foreign imports, speed up the transition from coal to natural gas and avoid a gas shortage during the upcoming winter heating season.

Today's third quarter earnings on the TSX:

  • Ensign Energy (ESI +7.1%) posted a $32.8 million loss in the third quarter, narrower than a $36.5 million loss for the same time last year. Revenues rose 17% y/y to $289 million while funds from operations increased 52% y/y to $60 million. The company says it is seeing higher demand in its US and international operations, but Canadian revenues have declined due wide pricing differentials caused by "limited" market access for both oil and gas production.

  • Painted Pony (PONY +10.6%) posted a $13.8 million loss in Q3, versus a profit of $14.6 million for the same time last year. Funds from operations nudged up 2% y/y to $30.3 million. Production grew 38% y/y to 58,330 boe/day, weighted 9% liquids. Gas production was negatively impacted by the shutdown of Enbridge's (ENB +2.9%) T-South network during most of October.

  • BlackPearl Resources (PXX +4.2%) swung to a profit in the third quarter, posting a net income of $1 million on revenues of $61 million, up 86% y/y. Production averaged 13,863 boe/day in Q3, up 53% y/y.

  • Crew Energy (CR +15.8%) posted a $1 million loss in Q3, versus a $2.1 million profit for the same time last year. Revenues grew 13% to $54 million while production averaged 23,680 boe/day in Q3, up 2% y/y.

Today's US energy earnings:

  • Occidental Petroleum (OXY +2.4%) posted a Q3 profit of US$1.4 billion, including a gain of US$700 million on the sale of domestic assets. Global production rose 16% to 696,000 boe/day.

  • DCP Midstream (DCP +5.4%) posted a net profit of US$81 million, versus a US$20 million loss for the same time last year. Revenues rose 38% y/y to US$2.68 billion. NGL pipeline volumes are up about 35% y/y from the same time last year.

  • NuStar Energy (NS +6.3%) posted a Q3 profit of US$48 million, up 25% y/y. Revenue rose 11% y/y to US$490 million. Throughput volumes on its pipelines, including crude and refined products, rose 23% y/y to 1.48 million bbl/day.

  • Diamond Offshore Drilling (DO +0.3%) posted a net loss of US$51 million, down from a US$69 million loss for the same time last year. Revenues declined 22% y/y to US$286 million.

OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$73.17▲0.558.33
 
86.29
WTI$63.10▼0.152.18
 
76.41
CDN LT$28.66▲3.326.50
 
69.32
C5+$45.45▲4.143.64
 
71.40
WCS$18.92▲5.617.92
 
56.21
CRUDE OIL FUTURES CURVES
BRENT
WTI
█ NOV 5   █ OCT 29   █ OCT 22   █ OCT 15   (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
  • Advantage O&G (AAV +11.9%)
  • Birchcliff Energy (BIR +8.3%)
  • Baytex Energy (BTE +8.2%)
  • Ensign Energy Svcs (ESI +7.1%)
  • Cenovus Energy (CVE +2.9%)
  • 12-MO HIGHS
  • None
  • 10-YR HIGHS
  • None
  • GOLDEN CROSSES
  • None
  • TSX BEARISH INDICATORS
    BOTTOM
    5
  • PrairieSky (PSK -3.7%)
  • Parkland Fuel (PKI -2.3%)
  • Shawcor (SCL -1.7%)
  • Altagas (ALA -1.5%)
  • Gran Tierra (GTE -0.5%)
  • 12-MO LOWS
  • Altagas (ALA -1.5%)
  • 10-YR LOWS
  • None
  • DEATH CROSSES
  • None
  • COMPANY TICKER CLOSE %CHG L 52WK H RANK  CHARTS
    INTEGRATED
    SuncorSU44.63▲1.340.49
     
    55.4722D   W
    Imperial OilIMO42.25▲0.533.43
     
    44.9184D   W
    Husky EnergyHSE18.37▲2.415.09
     
    22.9930D   W
    MIDSTREAM
    EnbridgeENB42.38▲2.937.36
     
    51.0476D   W
    TransCanadaTRP51.24▲1.048.92
     
    65.1833D   W
    Pembina PipelinePPL45.05▲4.137.60
     
    47.8487D   W
    Inter PipelineIPL22.25▲3.120.68
     
    27.9254D   W
    Keyera KEY33.11▲1.931.20
     
    38.9134D   W
    Gibson EnergyGEI21.77▲4.315.68
     
    23.0497D   W
    LARGE CAP E&P
    Cdn Natural ResCNQ38.40▲2.435.31
     
    49.0822D   W
    EncanaECA11.61▲3.511.03
     
    18.543D   W
    Cenovus EnergyCVE11.80▲2.99.03
     
    14.8429D   W
    TourmalineTOU19.94▲3.717.78
     
    27.2618D   W
    Seven GenerationsVII14.02▲2.512.82
     
    21.2515D   W
    SERVICES
    ShawcorSCL23.75▼-1.723.04
     
    29.5030D   W
    Pason SystemsPSI19.87▲1.716.05
     
    22.1071D   W
    Mullen Group MTL13.79▼-0.113.43
     
    16.9523D   W
    EnerflexEFX16.45▲3.813.55
     
    17.6590D   W
    Secure EnergySES8.51▲1.66.98
     
    9.8288D   W
    REFINING & MARKETING
    Parkland FuelPKI40.00▼-2.324.97
     
    47.4595↓D   W
    S&P 500 ENERGY STOCKS
    SPX BULLISH INDICATORS
    TOP 5
  • EQT Corp (EQT +8.3%)
  • Cabot O&G (COG +5.9%)
  • Helmerich & Payne (HP +4.8%)
  • Apache (APA +4.6%)
  • Hess Corp (HES +4.1%)
  • 12-MO HIGHS
  • None
  • 10-YR HIGHS
  • None
  • GOLDEN CROSSES
  • None
  • SPX BEARISH INDICATORS
    BOTTOM
    5
  • HollyFrontier (HFC -1.9%)
  • Valero Energy (VLO -0.6%)
  • Exxon Mobil (XOM -0.4%)
  • 12-MO LOWS
  • None
  • 10-YR LOWS
  • None
  • DEATH CROSSES
  • None
  • COMPANY TICKER CLOSE %CHG L 52WK H RANK  CHARTS
    INTEGRATED
    Exxon MobilXOM81.64▼-0.472.16
     
    89.3063D   W
    ChevronCVX118.94▲3.7107.54
     
    133.8852D   W
    MIDSTREAM
    Kinder MorganKMI17.26▲2.414.69
     
    19.8365D   W
    Williams CoWMB25.72▲0.623.54
     
    33.6742D   W
    ONEOKOKE63.95▲2.349.65
     
    71.9954D   W
    LARGE CAP E&P
    ConocoPhillipsCOP69.03▲1.848.97
     
    80.2453D   W
    EOG ResourcesEOG106.35▲3.996.54
     
    133.5318D   W
    Occidental PetroOXY69.95▲2.462.47
     
    87.6718D   W
    Anadarko PetroAPC54.69▲2.846.80
     
    76.705D   W
    Concho ResCXO141.96▲0.8123.63
     
    163.1138D   W
    SERVICES
    SchlumbergerSLB51.96▲1.150.72
     
    80.352D   W
    HalliburtonHAL35.75▲2.433.73
     
    57.863D   W
    Ntl-Oilwell VarcoNOV36.53▲1.231.47
     
    49.0814D   W
    TechnipFMCFTI26.68▲0.725.36
     
    35.009D   W
    Baker HughesBHGE26.85▲3.025.53
     
    37.764D   W
    REFINERS
    Phillips 66PSX100.52▲1.589.14
     
    123.9718D   W
    Valero EnergyVLO91.15▼-0.680.00
     
    126.986D   W
    Marathon PetroMPC69.76▲0.460.10
     
    88.4521D   W
    HollyFrontierHFC65.19▼-1.940.04
     
    83.2854D   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.A63.39▲1.860.53
     
    73.8636D   W
    TotalTOT58.47▲1.953.37
     
    65.6943D   W
    BPBP42.61▲2.436.15
     
    47.8343D   W
    EniE35.31▲1.032.13
     
    40.1543D   W
    EquinorEQNR25.70▲2.119.76
     
    28.9351D   W
    ANALYST RATINGS

    UPGRADES

    • Baytex Energy (BTE.TO): Upgraded from Market Perform to Outperform at Raymond James.

    • Chevron (CVX): Upgraded from Neutral to Outperform at Credit Suisse.

    • National Oilwell Varco (NOV): Upgraded from Hold to Buy at Tudor Pickering.

    • Parsley Energy (PE): Upgraded from Neutral to Outperform at Macquarie.

    DOWNGRADES

    • Encana (ECA.TO): Downgraded from Outperform to Peer Perform at Wolfe Research and from Overweight to Equal Weight at Morgan Stanley.


    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 continue downtrend as API predicts another build in US crude stockpiles

    Oil prices continue downtrend as API predicts another build in US crude stockpiles

    Oil prices mark fifth day of losses as concerns over supply shortages dissipate

    Oil prices mark fifth day of losses as concerns over supply shortages dissipate

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