OPEC's silence speaks volumes, sending oil prices sharply lower
Today's energy market summary:
OPEC surprised oil markets on Thursday by cancelling its scheduled press conference, leaving traders guessing on the magnitude of next year's production cuts. Another meeting is scheduled with Russia tomorrow, after which the cartel is expected to release a formal statement. Brent and WTI both sank about 2.5% on the news.
Differentials on Canadian oil all narrowed again today. The Canadian Light discount to WTI shrank by another US$3.50 a barrel, the WCS discount narrowed by US$1.50, while the C5+ discount fell by US$0.70/bbl.
According to the US Energy Information Administration (EIA), crude stockpiles declined sharply last week, mainly due to a 9 million barrel drop in the Gulf Coast. The EIA also reported a record volume of crude exports, surging to over 3 million bbl/day for the first time in US history. US imports of Canadian crude held steady at about 3.5 million bbl/day.
Today's equity market action:
Global bond yields continue to move lower, including Canadian bonds.
The loonie took another 1% haircut on Thursday, on a rather gloomy economic forecast from the Bank of Canada, lower commodity prices and fears of retaliation from the Chinese government due to the arrest of Huawei's CFO in Vancouver.
Renewed fears of a trade war between China and the US sent equity markets sharply lower in the morning. However, markets recovered by the end of the day, with most US markets ending Thursday roughly unchanged.
In Toronto, the TSX declined over 400 points by lunch time, but recovered slightly before the closing bell, ending Thursday 1.6% lower.
Energy ADRs listed on the NYSE also declined sharply on Thursday.
Today's notable energy news:
Western Energy Services (WRG.TO -6.0%) set a 2019 capital expenditure budget of $15 million, including $13 million of maintenance capital and $2 million set aside for expansion. The company says its expansion capital will be driven by "specific customer requirements."
Chevron (CVX -1.1%) set a US$20 billion capital and exploration budget for 2019, dedicated mostly to upstream spending. Over US$5 billion is being allocated to the Permian region and other US shale basins, with another US$4.3 billion dedicated to development of the "supergiant" Tengiz field in Kazakhstan. CEO Michael Wirth says more than two-thirds of next year's spending will be up and running within two years.
Williams Co (WMB -2.1%) has agreed to sell a number of small pipelines in the Gulf Coast to Houston-based Easton Energy for US$177 million in cash.
Azerbaijan's state-owned SOCAR has selected Honeywell (HON -0.8%) UOP’s Pressure Swing Adsorption (PSA) technology as part of the modernization of its Heydar Aliyev Oil Refinery in Baku. Honeywell will provide two PSA units, designed to supply "high-quality" hydrogen to the 120,000 bbl/day refinery. Financial terms of the deal were not disclosed.
|CURRENCIES & YIELDS|
|Suncor Energy||SU||41.08||▼-6.7||40.49||55.47||21||D W|
|Imperial Oil||IMO||37.86||▼-4.3||33.43||44.91||34||D W|
|Husky Energy||HSE||15.89||▼-5.4||15.29||22.99||19||D W|
|Pembina Pipeline||PPL||44.12||▼-2.1||37.60||47.84||74||D W|
|Inter Pipeline||IPL||21.46||▼-0.9||20.68||27.92||41||D W|
|Gibson Energy||GEI||19.37||▼-3.7||15.68||23.32||77||D W|
|LARGE CAP E&P|
|Cdn Natural Res||CNQ||35.24||▼-5.6||32.08||49.08||24||D W|
|Cenovus Energy||CVE||10.23||▼-7.7||9.03||14.84||19||D W|
|Vermilion Energy||VET||31.77||▼-2.7||30.55||50.46||16||D W|
|Pason Systems||PSI||19.37||▼-0.2||16.05||24.57||43||D W|
|Mullen Group||MTL||12.36||▼-1.0||12.04||16.93||22↑||D W|
|Secure Energy||SES||6.91||▼-1.6||6.72||9.82||24||D W|
|REFINING & MARKETING|
|Parkland Fuel||PKI||37.14||▼-0.4||25.12||47.45||87||D W|
|Exxon Mobil||XOM||78.39||▼-1.3||72.16||89.30||55||D W|
|Kinder Morgan||KMI||16.46||▼-1.3||14.69||19.83||52||D W|
|Williams Co||WMB||24.53||▼-2.1||23.54||33.67||40||D W|
|LARGE CAP E&P|
|EOG Resources||EOG||102.13||▼-1.9||96.54||133.53||31||D W|
|Occidental Petro||OXY||67.52||▼-3.1||62.47||87.67||19||D W|
|Anadarko Petro||APC||51.59||▼-2.6||46.80||76.70||10||D W|
|Concho Res||CXO||120.82||▼-5.9||117.74||163.11||23||D W|
|Ntl-Oilwell Varco||NOV||30.27||▼-4.4||29.73||49.08||5||D W|
|Baker Hughes||BHGE||21.47||▼-2.9||21.05||37.76||1||D W|
|Marathon Petro||MPC||63.55||▲0.3||60.64||88.45||20||D W|
|Phillips 66||PSX||92.60||▲1.3||88.99||123.97||21||D W|
|Valero Energy||VLO||78.84||▼-0.8||76.25||126.98||6||D W|
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.