Canadian Light gains almost 10% as discount to WTI falls below US$15 a barrel

Canadian Light gains almost 10% as discount to WTI falls below US$15 a barrel

Editor's note: US exchanges closed on Wednesday for National Day of Mourning. No data provided for NYSE listings.

 

Today's energy market summary:

  • Brent and WTI dipped less than 1% ahead of tomorrow's big OPEC meeting in Vienna. The cartel's monitoring committee is expected to announce 2019 production quotas. Oil markets are expecting a cut of about 1.0 million bbl/day, down from last week's estimate of a 1.3 million barrel reduction.

  • President Trump weighed in on twitter today, asking OPEC to keep "oil flows as is, not restricted" in order to prevent prices from moving higher.

  • In Canadian oil markets, the discount on Canadian Light narrowed by another US$3.70/bbl, to US$14.28, returning to the levels of early September and sending prices higher by over 9%. 

  • Edmonton Condensate (C5+) rose 1.4%, as the differential to WTI fell below US$10 for the first time since mid-October. The discount on Western Canadian Select (WCS) was unchanged on Wednesday.

Today's notable energy news:

  • Markets in Europe and Asia were down overnight, in sympathy with yesterday's meltdown in US markets. US markets were closed in honour of President George H.W. Bush's funeral.

  • In Toronto, the TSX rose 0.8%. Gains were broadly based except for the utilities sector, which was unchanged for the day, and yet another sell-off in cannabis stocks. The energy sector rose 2.6% despite new multi-year lows among several services names and smaller cap producers.

  • The Canadian dollar weakened almost 1% after the Bank of Canada left interest rates unchanged, and indicated a slower pace of future rate hikes. Yields on Canadian 10-year bonds also declined.

Today's notable energy news:

  • TransCanada's (TRP.TO +0.5%) Keystone pipeline and Enbridge's (ENB.TO +2.1%) Mainline network resumed normal operations on Wednesday, one day after a severe storm in Saskatchewan knocked out power to both pipelines. TransCanada says exports have been fully restored, while Enbridge says its system has mostly returned to normal, but warns intermittent service outages may still occur.

  • TransCanada also announced an additional 675,000 GJ/day of new natural gas transportation contracts from Western Canada to Ontario, Quebec, the Maritimes and the Northeastern US on Canadian Mainline network. The company says customers have signed long-term binding contracts of between 10 and 21 years to its North Bay Junction, which will require a $250 million expansion. The expansion will be phased in between November 2019 and November 2021.

  • Canadian Natural Resources (CNQ.TO +4.2%) cut their 2019 capital budget to about $3.7 billion, 20% lower than the current year. About $3.1 billion is reserved for maintenance capital. The reduction was blamed on lack of market access and a "dysfunctional" pipeline nomination process. CNRL says it expects to produce between 1.03 and 1.12 million boe/day in 2019, weighted 76% liquids.

  • Calfrac Well Services (CFW.TO +3.2%) announced a 2019 capital program of $149 million, including $126 million for maintenance capital. CEO Fernando Aguilar says over 80% of that capital will be spent outside of Canada due to "uncertainty in the spending plans" of domestic producers.

  • Faroe Petroleum (FPM.L -0.1%) and Equinor (EQNR n/c) agreed to swap several fields in the Norwegian Continental Shelf. The non-cash transaction was "balanced," taking effect January 1st, subject to government approval. 

  • Brazilian oil major Petrobras (PBR n/c) says it hopes to raise as much as US$27 billion in cash through asset sales and partnerships by 2023, as part of its 5-year business plan to boost investments to US$84 billion. Assets on the auction block include its fertilizer, LPG, biodiesel and ethanol businesses. The company says it plans to refocus its portfolio towards more deepwater production off the coast of Brazil.

OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$61.56▼0.858.71
 
86.29
WTI$52.89▼0.750.29
 
76.41
CDN LT$38.61▲9.420.83
 
69.32
C5+$43.32▲1.437.04
 
71.40
WCS$30.13▼1.112.59
 
56.21
CRUDE OIL FUTURES CURVES
BRENT
WTI
█ DEC 5   █ NOV 28   █ NOV 21   █ NOV 14   (USD/BBL)
MARKET OVERVIEW
MARKETS
CURRENCIES & YIELDS
    TSX SECTORS
52-WK
ENERGY SECTORS

TSX ENERGY SUB-SECTORS
TSX ENERGY STOCKS
TSX BULLISH INDICATORS
TOP 5
  • Crescent Point (CPG +4.8%)
  • Baytex Energy (BTE +4.7%)
  • Cdn Natural Res (CNQ +4.2%)
  • ARC Resources (ARX +3.6%)
  • Suncor Energy (SU +3.3%)
  • 12-MO HIGHS
  • None
  • 10-YR HIGHS
  • None
  • GOLDEN CROSSES
  • None
  • TSX BEARISH INDICATORS
    BOTTOM
    5
  • TORC O&G (TOG -3.5%)
  • Peyto Exploration (PEY -3%)
  • Birchcliff Energy (BIR -2.3%)
  • Precision Drilling (PD -1.7%)
  • Ensign Energy Svcs (ESI -1.2%)
  • 12-MO LOWS
  • Secure Energy (SES +1.2%)
  • Whitecap Res (WCP -0.7%)
  • Peyto Exploration (PEY -3%)
  • TORC O&G (TOG -3.5%)
  • Paramount Res (POU -0.9%)
  • Precision Drilling (PD -1.7%)
  • Kelt Exploration (KEL 0%)
  • Tamarack Valley (TVE 0%)
  • Advantage O&G (AAV +3%)
  • 10-YR LOWS
  • Peyto Exploration (PEY -3%)
  • Precision Drilling (PD -1.7%)
  • Advantage O&G (AAV +3%)
  • DEATH CROSSES
  • None
  • COMPANY TICKER CLOSE %CHG L 52WK H RANK  CHARTS
    INTEGRATED
    Suncor EnergySU44.02▲3.340.49
     
    55.4732D   W
    Imperial OilIMO39.57▲3.133.43
     
    44.9146D   W
    Husky EnergyHSE16.79▼-0.215.29
     
    22.9927D   W
    MIDSTREAM
    EnbridgeENB44.50▲2.137.36
     
    51.0493D   W
    TransCanadaTRP55.32▲0.548.92
     
    63.2989D   W
    Pembina PipelinePPL45.06▲1.337.60
     
    47.8484D   W
    Inter PipelineIPL21.65▲1.920.68
     
    27.9239D   W
    Keyera KEY28.96▲1.427.85
     
    38.9120D   W
    Gibson EnergyGEI20.11▼-0.815.68
     
    23.3288D   W
    LARGE CAP E&P
    Cdn Natural ResCNQ37.33▲4.232.08
     
    49.0836D   W
    Cenovus EnergyCVE11.08▲2.99.03
     
    14.8434D   W
    EncanaECA9.15▲2.58.86
     
    18.544D   W
    TourmalineTOU18.57▲0.317.73
     
    26.1918D   W
    Vermilion EnergyVET32.65▼0.030.55
     
    50.4616D   W
    SERVICES
    Pason SystemsPSI19.40▼-0.616.05
     
    24.5742D   W
    EnerflexEFX16.15▲0.413.55
     
    18.7280D   W
    ShawcorSCL19.07▼-0.618.72
     
    29.5010D   W
    Mullen Group MTL12.48▲1.412.04
     
    16.9321↑D   W
    Secure EnergySES7.02▲1.26.90
     
    9.8223D   W
    REFINING & MARKETING
    Parkland FuelPKI37.28▼-0.725.12
     
    47.4585D   W
    ANALYST RATINGS

    UPGRADES

    • Keane Group (FRAC): Upgraded from Hold to Buy at GMP Securities.

    DOWNGRADES

    • None


    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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