Oil prices edge higher on Libyan supply disruptions and expectations for lower US crude stockpiles

Oil prices edge higher on Libyan supply disruptions and expectations for lower US crude stockpiles

Today's energy market summary:

  • Global oil prices perked up slightly today on news of reduced output from Libya, lower inventories in the US, and falling differentials on Canadian crude.

  • Brent rose 0.4% while WTI rose 1.3%. The discount on Canadian heavy crude narrowed by another US$1/bbl, boosting WCS by almost 6% for the day. 

  • Libya cut shipments by 400,000 bbl/day after the country's national oil company declared force majeure on exports from the El Sharara oilfield, due to clashes with a militia group.

  • API is forecasting a 10 million barrel drawdown in US crude stockpiles for last week. Official numbers from the US Energy Information Administration (EIA) are due tomorrow morning.

  • The EIA cut its 2019 oil price forecasts by over 15%, with WTI and Brent now expected to average about US$54 and US$61 a barrel, respectively. The EIA also says crude oil production should increase 1.2 bbl/day next year, rising from 10.88 million bbl/day in 2018 to 12.06 million bbl/day in 2019.

Today's equity market action:

  • North American markets opened higher this morning, but gave back most of the gains in the afternoon. All US markets were roughly unchanged for the day while the TSX posted another decline of 0.4%. This is the fourth day of declines for the TSX, which touched a 2-year low by the end of the trading day.

  • Energy was the worst performing sector in Toronto, led lower by the Big Three integrated names.

  • The US energy basket was roughly unchanged, as heavy losses among service providers offset gains in other subsectors.

  • JP Morgan says it sees a moderating pace of drilling activity in the US oil patch, reducing expectations for earnings in 2019. The bank downgraded several oilfield services names, including Schlumberger (SLB -1.7%), Core Labs (CLB -4.7%), Weatherford (WFT -2.1%), Superior Energy (SPN -4.1%) and Nabors Industries (NBR +4.0%).

  • European ADRs on the NYSE mostly ended the day lower, as the US dollar creeped higher for the second day in a row.

Today's notable energy news:

  • Enbridge (ENB.TO +0.1%) says it plans to reverse flow on its 150,000 bbl/day Southern Lights pipeline, which presently ships diluent from the Midwest into Edmonton, in order to increase Canada's crude export capacity. The company says it can boost output on its Mainline by as much as 100,000 bbl/day in the short term, and up to 450,000 bbl/day by 2023, not including the extra 370,000 bbl/day expected after its Line 3 Replacement project is completed by the end of next year. Enbridge also boosted its annual dividend by 10% to $2.95 per share.

  • Cenovus Energy (CVE.TO +0.6%) has set a 2019 capital spending budget of $1.2 to $1.4 billion, 4% lower than 2018. Most of the funds will go towards sustaining production at its Foster Creek and Christina Lake SAGD operations. The company expects to boost oil sands production 3% y/y to as much as 395,000 bbl/day, not including curtailment volumes recently mandated by the Alberta government.

  • Ensign Energy Services (ESI.TO -2.6%) now says it owns 87% of outstanding Trinidad Drilling (TDG.TO n/c) shares and reminds shareholders they have until December 21 to tender their shares for $1.68 per share.

  • North American Construction Group (NOA.TO +2.2%) announced a three-year extension to an existing two-year earthworks contract with a "significant customer." The new contract now expires at the end of 2023. The total value of the 5-year deal is about $750 million.

  • A subsidiary of Enbridge (ENB.TO +0.1%) has exercised its option to acquire another 35% stake in Gray Oak Holdings, a subsidiary of Phillips 66 Partners (PSXP +0.6%), which owns 75% of the Gray Oak Pipeline. Diamondback Energy (FANG -0.6%) is expected to close on another 10% stake in the  project early next year, reducing PSXP's stake to 42.25%. Gray Oak will transport 900,000 bbl/day of crude from the Permian and Eagle Ford basins to refineries and export terminals in Texas. The line is expected to be in service by the end of 2019.

  • Marathon Oil (MRO +0.2%) reported "encouraging early production results" at several pads drilled in the Williston Basin area of North Dakota. MRO also announced the repurchase of US$150 million in common shares, bringing its year-to-date total to US$650 million, with another US$850 million of buybacks outstanding.

  • Cheniere Energy (LNG +1.3%) shipped its first LNG cargo from Corpus Christi, the first ever LNG shipment from the state of Texas. More test cargos are planned from the Corpus Christi facility, as well as the fifth liquefaction train at the Sabine Pass LNG terminal in Louisiana. Both facilities will begin long-term service in the first quarter of next year.

  • Production out of Total's (TOT -0.3%) 225,500 bbl/day Port Arthur refinery in Texas has been disrupted due to an outage of its sulphur recovery unit (SRU). Output was cut by 40% in November when the SRU was taken offline.

  • Total also announced plans to drill one last exploration well off the coast of French Guyana. Five wells have already been drilled in the region to determine the viability of the field. The French oil major also inaugurated the start of Train 3 at its Yamal LNG project in Russia, one year ahead of schedule. Output from Yamal has now reached its full capacity of 16.5 million t/year.

OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$60.20▲0.458.71
 
86.29
WTI$51.65▲1.350.29
 
76.41
CDN LT$42.78▲1.920.83
 
69.32
C5+$43.39▲2.737.04
 
71.40
WCS$33.43▲5.812.59
 
56.21
CRUDE OIL FUTURES CURVES
BRENT
WTI
█ DEC 11   █ DEC 4   █ NOV 27   █ NOV 20   (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
  • Nuvista Energy (NVA +10.7%)
  • Trican Well Svc (TCW +6.7%)
  • Whitecap Res (WCP +4.3%)
  • Crescent Point (CPG +3.7%)
  • CES Energy (CEU +3.6%)
  • 12-MO HIGHS
  • None
  • 10-YR HIGHS
  • None
  • GOLDEN CROSSES
  • None
  • TSX BEARISH INDICATORS
    BOTTOM
    5
  • Baytex Energy (BTE -3.9%)
  • Peyto Exploration (PEY -3.4%)
  • Precision Drilling (PD -3.4%)
  • Cdn Natural Res (CNQ -3.3%)
  • Ensign Energy Svcs (ESI -2.6%)
  • 12-MO LOWS
  • Inter Pipeline (IPL -1%)
  • Tourmaline (TOU +2.1%)
  • Mullen Group (MTL -0.5%)
  • Altagas (ALA -1.7%)
  • ARC Resources (ARX -2.4%)
  • Whitecap Res (WCP +4.3%)
  • Peyto Exploration (PEY -3.4%)
  • Baytex Energy (BTE -3.9%)
  • TORC O&G (TOG +2.4%)
  • Freehold Royalties (FRU -0.4%)
  • Precision Drilling (PD -3.4%)
  • Ensign Energy Svcs (ESI -2.6%)
  • Advantage O&G (AAV -0.9%)
  • 10-YR LOWS
  • Tourmaline (TOU +2.1%)
  • Altagas (ALA -1.7%)
  • ARC Resources (ARX -2.4%)
  • Peyto Exploration (PEY -3.4%)
  • Precision Drilling (PD -3.4%)
  • Ensign Energy Svcs (ESI -2.6%)
  • Advantage O&G (AAV -0.9%)
  • DEATH CROSSES
  • None
  • COMPANY TICKER CLOSE %CHG L 52WK H RANK  CHARTS
    INTEGRATED
    Suncor EnergySU40.84▼-2.240.49
     
    55.4724D   W
    Imperial OilIMO35.75▼-2.133.43
     
    44.9123↓D   W
    Husky EnergyHSE15.40▼-2.215.30
     
    22.9918D   W
    MIDSTREAM
    EnbridgeENB42.12▲0.137.36
     
    51.0471D   W
    TransCanadaTRP52.82▲0.148.92
     
    63.2170D   W
    Pembina PipelinePPL43.39▲0.837.60
     
    47.8469D   W
    Inter PipelineIPL20.29▼-1.020.26
     
    27.8728D   W
    Keyera KEY27.62▼-0.327.27
     
    38.9121D   W
    Gibson EnergyGEI19.49▼-0.615.68
     
    23.3284D   W
    LARGE CAP E&P
    Cdn Natural ResCNQ34.80▼-3.332.08
     
    49.0828D   W
    Cenovus EnergyCVE10.10▲0.69.03
     
    14.8422D   W
    EncanaECA8.26▼-1.18.11
     
    18.542D   W
    TourmalineTOU17.36▲2.116.87
     
    26.1915D   W
    Vermilion EnergyVET30.80▲1.030.29
     
    50.4615D   W
    SERVICES
    Pason SystemsPSI18.73▼-1.716.05
     
    24.5737D   W
    EnerflexEFX15.45▲0.313.55
     
    18.7267D   W
    ShawcorSCL17.92▲0.717.58
     
    29.5010D   W
    Mullen Group MTL11.97▼-0.511.94
     
    16.9320D   W
    Secure EnergySES7.21▲1.86.72
     
    9.8249↑D   W
    REFINING & MARKETING
    Parkland FuelPKI36.84▲0.825.60
     
    47.4589D   W
    S&P 500 ENERGY STOCKS
    SPX BULLISH INDICATORS
    TOP 5
  • EQT Corp (EQT +3.3%)
  • Devon Energy (DVN +1.8%)
  • Helmerich & Payne (HP +1.4%)
  • Concho Res (CXO +1.2%)
  • Anadarko Petro (APC +1.1%)
  • 12-MO HIGHS
  • None
  • 10-YR HIGHS
  • None
  • GOLDEN CROSSES
  • None
  • SPX BEARISH INDICATORS
    BOTTOM
    5
  • Ntl-Oilwell Varco (NOV -3.7%)
  • Apache (APA -2.2%)
  • TechnipFMC (FTI -1.8%)
  • Schlumberger (SLB -1.7%)
  • Halliburton (HAL -1.6%)
  • 12-MO LOWS
  • Schlumberger (SLB -1.7%)
  • Halliburton (HAL -1.6%)
  • Ntl-Oilwell Varco (NOV -3.7%)
  • Baker Hughes (BHGE +0.1%)
  • TechnipFMC (FTI -1.8%)
  • Apache (APA -2.2%)
  • Noble Energy (NBL -1.5%)
  • 10-YR LOWS
  • Baker Hughes (BHGE +0.1%)
  • Apache (APA -2.2%)
  • DEATH CROSSES
  • Hess Corp (HES +1%)
  • COMPANY TICKER CLOSE %CHG L 52WK H RANK  CHARTS
    INTEGRATED
    Exxon MobilXOM76.68▲0.272.16
     
    89.3056D   W
    ChevronCVX115.47▲0.5107.54
     
    133.8858D   W
    MIDSTREAM
    Kinder MorganKMI16.12▲0.514.69
     
    19.8352D   W
    Williams CoWMB23.93▼-0.623.54
     
    33.6737D   W
    ONEOKOKE58.98▼-0.351.28
     
    71.9941D   W
    LARGE CAP E&P
    ConocoPhillipsCOP65.44▲0.450.18
     
    80.2459D   W
    EOG ResourcesEOG102.07▲0.496.54
     
    133.5339D   W
    Occidental PetroOXY64.70▲0.462.47
     
    87.6722D   W
    Anadarko PetroAPC51.64▲1.747.37
     
    76.7016D   W
    Concho ResCXO121.85▲1.2117.74
     
    163.1133D   W
    SERVICES
    SchlumbergerSLB41.24▼-1.740.53
     
    80.351D   W
    HalliburtonHAL28.80▼-1.628.17
     
    57.862D   W
    Ntl-Oilwell VarcoNOV28.07▼-3.727.99
     
    49.082D   W
    Baker HughesBHGE21.29▲0.120.81
     
    37.763D   W
    TechnipFMCFTI20.59▼-1.820.50
     
    35.003D   W
    REFINERS
    Marathon PetroMPC61.34▲0.659.55
     
    88.4525D   W
    Phillips 66PSX88.42▼-0.586.62
     
    123.9719D   W
    Valero EnergyVLO73.27▼-0.271.48
     
    126.984D   W
    HollyFrontierHFC55.11▲0.342.42
     
    83.2818D   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.A58.49▼-0.657.65
     
    73.8612D   W
    TotalTOT53.82▼-0.553.37
     
    65.6940D   W
    BPBP39.08▼-0.736.15
     
    47.8343D   W
    EniE31.67▼-0.431.18
     
    40.1535D   W
    EquinorEQNR22.74▼-0.920.05
     
    28.9334D   W
    ANALYST RATINGS

    UPGRADES

    • FTS International (FTSI): Upgraded from Market Perform to Outperform at Wells Fargo.

    • Helmerich & Payne (HP): Upgraded from Market Perform to Outperform at Wells Fargo.

    • Pioneer Natural Resources (PXD): Upgraded from Market Perform to Outperform at Wells Fargo.

    • Total (TOT): Upgraded from Neutral to Buy at BofA.

    DOWNGRADES

    • Badger Daylighting (BAD.TO): Downgraded from Buy to Hold at Industrial Alliance.

    • Bonterra Energy (BNE.TO): Downgraded from Outperform to Sector Perform at National Bank.

    • Core Laboratories (CLB): Downgraded from Overweight to Neutral at JPMorgan.

    • Equinor (EQNR): Downgraded from Buy to Neutral at BofA.

    • Matador Resources (MTDR): Downgraded from Outperform to Market Perform at Wells Fargo.

    • Nabors Industries (NBR): Downgraded from Neutral to Underweight at JPMorgan.

    • NCS Multistage (NCSM): Downgraded from Buy to Neutral at Citigroup.

    • PetroChina (PTR): Downgraded from Buy to Hold at BNP Paribas.

    • Schlumberger (SLB): Downgraded from Overweight to Neutral at JPMorgan.

    • Superior Energy Services (SPN): Downgraded from Neutral to Underweight at JPMorgan.

    • Weatherford Int'l (WFT): Downgraded from Outperform to Market Perform at Wells Fargo and from Overweight to Neutral at Wells Fargo.


    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.
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