Canadian benchmarks take a haircut on February contract expiry
Today's energy market summary:
- Brent and WTI dipped slightly on Thursday, but managed to hold above their key US$60/$50 support levels.
- Canadian benchmarks all posted losses due to yesterday's expiry of the February contract. March contract differentials for Canadian Light and WCS both widened by about US$2.50 a barrel, to US$5.65 and about US$12, respectively.
- The discount on Edmonton Condensate also widened, sending C5+ prices down 4%.
- Wholesale gasoline prices edged up another 1% on Thursday, ending the day up 15% from the lows of Christmas Eve.
- After a very volatile week, Henry Hub rose about 1%, while AECO gas prices were unchanged for the day.
- In its January Oil Market Report, OPEC says it produced an estimated 31.6 million bbl/day in December, down 751,000 bbl/day from the previous month.
Today's equity market action:
- North American equity markets mostly posted gains on Thursday on news that the US has backed off from plans to levy more tariffs against Chinese goods.
- The S&P 500 rose 0.8% while the TSX increased 0.7%. Gains were led by the more offensive sectors.
- The Canadian energy sector rose 0.4%, while US counterparts gained 1%, with gains posted across most subsectors.
Today's notable energy news:
- MEG Energy shares plunged 36% after Husky Energy walked away from its hostile bid to takeover the firm. Husky says it failed to garner enough support for the deal, and the business climate in Alberta has deteriorated considerably since the offer was first announced last fall. Husky says it remains committed to maintaining a strong balance sheet and returning cash to its shareholders through dividend payouts. HSE shares rose 12% for the day.
- According to Bloomberg, Kinder Morgan is looking to sell its carbon dioxide business, estimated to be worth US$5 billion. Kinder Morgan is North America's largest transporter of carbon dioxide, collected from underground deposits and used primarily for enhanced oil recovery in older oil fields.
- US federal regulators (FERC) have cleared TransCanada to begin service on another section of its 2.7 Bcf/day Mountaineer Xpress pipeline in West Virginia. To date, FERC has approved service on 113 out of 165 miles of piping.
- Schlumberger was awarded a drilling contract with Equinor offshore Brazil, estimated to be worth at least US$200 million.
- Brazil's solicitor general has lifted an injunction that prevented Petrobras from selling its Transportadora Associada de Gas (TAG) natural gas network. The company had been in talks with France's Engie to sell its 90% stake in TAG, worth an estimated US$7 billion.
- The government of East Timor has approved a US$650 million taxpayer buyout of both ConocoPhillips' and Royal Dutch Shell's stake in the Greater Sunrise Project. The government now owns a majority of the offshore gas field, along with Australia's Woodside Petroleum and Japan's Osaka Gas. The field holds an estimated 5.1 Tcf/day of gas, but development has been stalled due to a territorial dispute between Australia and East Timor.
- EQT Midstream Partners raised its quarterly dividend 1% to $1.13 per share.
|CURRENCIES & YIELDS|
|Suncor Energy||SU||41.55||▲1.9||35.53||55.47||D W|
|Imperial Oil||IMO||36.95||▲0.9||33.43||44.91||D W|
|Husky Energy||HSE||17.45||▲12.4||13.33||22.99||D W|
|Pembina Pipeline||PPL||44.94||▲1.7||37.60||47.84||D W|
|Inter Pipeline||IPL||21.27||▲0.6||18.60||25.88||D W|
|Gibson Energy||GEI||19.92||▲0.7||15.68||23.32||D W|
|LARGE CAP E&P|
|Cdn Natural Res||CNQ||36.41||▼-0.5||30.11||49.08||D W|
|Cenovus Energy||CVE||10.69||▲1.0||8.74||14.84||D W|
|Vermilion Energy||VET||33.01||▲2.2||26.67||50.46||D W|
|Pason Systems||PSI||21.02||▲1.7||16.05||24.57||D W|
|Mullen Group||MTL||12.90||▲3.3||11.39||16.93||D W|
|Secure Energy||SES||8.12||▲1.9||6.25||9.82||D W|
|REFINING & MARKETING|
|Parkland Fuel||PKI||36.90||▼-0.5||27.36||47.45||D W|
|Exxon Mobil||XOM||72.13||▲0.7||64.65||89.30||D W|
|Kinder Morgan||KMI||17.72||▲1.4||14.62||19.71||D W|
|Williams Co||WMB||26.16||▲1.2||20.36||33.67||D W|
|LARGE CAP E&P|
|EOG Resources||EOG||99.05||▲0.4||82.04||133.53||D W|
|Occidental Petro||OXY||65.83||▲1.1||56.83||87.67||D W|
|Anadarko Petro||APC||48.05||▲2.7||40.40||76.70||D W|
|Pioneer Natural Res||PXD||143.27||▼-0.2||119.08||213.40||D W|
|Baker Hughes||BHGE||23.65||▲2.2||20.09||37.76||D W|
|Ntl-Oilwell Varco||NOV||29.79||▲1.5||24.27||49.08||D W|
|Marathon Petro||MPC||65.79||▲2.3||54.29||88.45||D W|
|Phillips 66||PSX||93.42||▲0.5||78.44||123.97||D W|
|Valero Energy||VLO||80.49||▲1.9||68.81||126.98||D W|
Peyto Exploration & Development (PEY): Downgraded from Outperform to Market Perform at Raymond James.
Patterson-UTI energy (PTEN): Downgraded from Overweight to Neutral at JPMorgan.
Superior Energy Services (SPN): Downgraded from Outperform to Market Perform at Cowen.
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