Oil prices end Friday on a high note as China offers to buy billions in US exports

Oil prices end Friday on a high note as China offers to buy billions in US exports

Today's energy market summary:

  • Oil prices all moved higher today on news that China may consider ramping up purchases of US crude in order to narrow its trade gap with the Americans. China's trade surplus with the US currently sits at US$323 billion.
  • Brent gained 2.5% while WTI rose over 3%. The Brent futures curve has moved from being slightly in contango to being almost perfectly flat over the next 6 months.
  • Canadian Light rose almost 4% while WCS gained over 6%, as the heavy discount narrowed by US$0.75 per barrel.
  • According to the International Energy Agency (IEA), world oil supply fell by 950,000 bbl/day in December, falling to 100.6 million bbl/day. Russian output hit a record 11.5 million bbl/day during the month. The IEA kept its 2019 oil demand growth forecast unchanged at 1.4 million bbl/day.
  • According to Baker Hughes, the US took 21 oil rigs out of service this week, reducing the total to 852, the lowest since last May. Canada put 25 new oil rigs into service, to a total of 128.

Today's equity market action:

  • Markets continued their relief rally on Friday, capping off its fourth consecutive week of gains. The Dow Jones Industrial surged over 300 points (+1.4%), led higher by transport stocks. Overnight, markets in Europe and Asia also posted sizeable gains.
  • The broader S&P 500 gained 1.3% while the TSX rose 0.6%. Except for Canadian gold stocks, gains were seen across all sectors.
  • The energy sectors rose 0.7% on the TSX and almost 2% on the S&P 500, with most components ending Friday higher.
  • US bond yields all ticked higher on Friday, boosting the US dollar another 0.3% for the day and 0.8% for the week, the first weekly increase since early December.

Today's notable energy news:

  • Moody's Investors Service called Husky Energy's failed takeover of MEG Energy "credit positive." The ratings agency says the acquisition would have weakened Husky's balance sheet and increase its exposure to the heavy oil discount.
  • Australia's WorleyParsons was awarded another EPC contract with Encana for its Pipestone Processing Facility, located in Alberta's Montney region.
  • China's CNOOC says it wants to double its proven oil and gas reserves by 2025 by investing heavily in exploration. CNOOC held an estimated 2.6 billion barrels of oil equivalent in reserves at the end of 2017.

Today's Q4/2018 earnings:

  • Schlumberger reported a net income of US$538 million in Q4/2018, versus versus a US$2.3 billion loss in the previous year. Full year revenues rose 8% to US$32.8 billion, with growth being driven primarily by its North American operations. This year's capital spending program is forecasted at US$1.5 to US$1.7 billion, down from US$2.2 billion in 2018.
OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$62.70▲2.550.47
 
86.29
WTI$53.80▲3.342.53
 
76.41
CDN LT$48.15▲3.720.83
 
69.32
C5+$50.05▲3.637.04
 
71.40
WCS$42.60▲6.212.59
 
56.21

CRUDE OIL FUTURES CURVES
BRENT
WTI
█ JAN 18   █ JAN 11   █ JAN 4   █ DEC 28   (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
  • Trican Well Svc (TCW +3.8%)
  • Paramount Res (POU +3.2%)
  • Tourmaline (TOU +2.6%)
  • ARC Resources (ARX +2.4%)
  • Suncor Energy (SU +2.3%)
  • 12-MO HIGHS
  • None
  • 10-YR HIGHS
  • None
  • GOLDEN CROSSES
  • None
  • TSX BEARISH INDICATORS
    BOTTOM
    5
  • Husky Energy (HSE -4.3%)
  • MEG Energy (MEG -2.7%)
  • Baytex Energy (BTE -2.3%)
  • Birchcliff Energy (BIR -1.2%)
  • Peyto Exploration (PEY -1.1%)
  • 12-MO LOWS
  • None
  • 10-YR LOWS
  • None
  • DEATH CROSSES
  • None
  • COMPANY TICKER CLOSE %CHG L 52WK H CHART
    INTEGRATED
    Suncor EnergySU42.49▲2.335.53
     
    55.47D   W
    Imperial OilIMO37.21▲0.733.43
     
    44.91D   W
    Husky EnergyHSE16.70▼-4.313.33
     
    22.99D   W
    MIDSTREAM
    EnbridgeENB47.91▲1.137.36
     
    49.68D   W
    TransCanadaTRP55.29▲0.647.90
     
    60.22D   W
    Pembina PipelinePPL45.33▲0.937.60
     
    47.84D   W
    Inter PipelineIPL21.58▲2.118.60
     
    25.88D   W
    Keyera KEY28.21▲0.424.05
     
    38.91D   W
    Gibson EnergyGEI20.00▲0.415.68
     
    23.32D   W
    LARGE CAP E&P
    Cdn Natural ResCNQ36.51▲0.330.11
     
    49.08D   W
    Cenovus EnergyCVE10.79▲0.98.74
     
    14.84D   W
    EncanaECA9.34▲1.56.90
     
    18.54D   W
    TourmalineTOU19.18▲2.615.84
     
    26.19D   W
    Vermilion EnergyVET32.67▼-1.026.67
     
    50.46D   W
    SERVICES
    Pason SystemsPSI21.18▲0.816.05
     
    24.57D   W
    EnerflexEFX17.39▲0.613.55
     
    18.72D   W
    Mullen Group MTL12.82▼-0.611.39
     
    16.93D   W
    ShawcorSCL18.90▲1.015.11
     
    29.50D   W
    Secure EnergySES8.06▼-0.76.25
     
    9.82D   W
    REFINING & MARKETING
    Parkland FuelPKI37.05▲0.727.36
     
    47.45D   W
    S&P 500 ENERGY STOCKS
    SPX BULLISH INDICATORS
    TOP 5
  • Schlumberger (SLB +8.1%)
  • Halliburton (HAL +4.4%)
  • TechnipFMC (FTI +3.5%)
  • Devon Energy (DVN +2.9%)
  • Valero Energy (VLO +2.6%)
  • 12-MO HIGHS
  • None
  • 10-YR HIGHS
  • None
  • GOLDEN CROSSES
  • None
  • SPX BEARISH INDICATORS
    BOTTOM
    5
  • Concho Res (CXO -0.2%)
  • 12-MO LOWS
  • None
  • 10-YR LOWS
  • None
  • DEATH CROSSES
  • None
  • COMPANY TICKER CLOSE %CHG L 52WK H CHART
    INTEGRATED
    Exxon MobilXOM72.99▲1.264.65
     
    89.30D   W
    ChevronCVX114.37▲2.2100.22
     
    132.67D   W
    MIDSTREAM
    Kinder MorganKMI18.01▲1.614.62
     
    19.71D   W
    Williams CoWMB26.40▲0.920.36
     
    33.67D   W
    ONEOKOKE63.19▲2.150.26
     
    71.99D   W
    LARGE CAP E&P
    ConocoPhillipsCOP67.90▲1.450.18
     
    80.24D   W
    EOG ResourcesEOG101.05▲2.082.04
     
    133.53D   W
    Occidental PetroOXY67.03▲1.856.83
     
    87.67D   W
    Anadarko PetroAPC48.67▲1.340.40
     
    76.70D   W
    Pioneer Natural ResPXD144.90▲1.1119.08
     
    213.40D   W
    SERVICES
    SchlumbergerSLB44.73▲8.134.99
     
    80.35D   W
    HalliburtonHAL32.25▲4.424.70
     
    57.86D   W
    Baker HughesBHGE24.12▲1.920.09
     
    37.76D   W
    Ntl-Oilwell VarcoNOV30.45▲2.224.27
     
    49.08D   W
    TechnipFMCFTI24.08▲3.518.20
     
    34.97D   W
    REFINERS
    Marathon PetroMPC66.09▲0.554.29
     
    88.45D   W
    Phillips 66PSX95.30▲2.078.44
     
    123.97D   W
    Valero EnergyVLO82.59▲2.668.81
     
    126.98D   W
    HollyFrontierHFC55.97▲1.642.42
     
    83.28D   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 CHART
    Royal Dutch ShellRDS.A61.07▲1.555.04
     
    73.86D   W
    TotalTOT54.56▲1.549.70
     
    65.69D   W
    BPBP40.76▲1.636.15
     
    47.83D   W
    EniE33.44▲2.329.75
     
    40.15D   W
    EquinorEQNR22.76▲1.619.95
     
    28.93D   W
    ANALYST RATINGS

    UPGRADES

    • Calfrac Well Services (CFW.TO): Upgraded from Outperform to Strong Buy at Raymond James.

    • Chevron (CVX): Upgraded from Neutral to Buy at UBS.

    • ENI (E): Upgraded from Underweight to Neutral at Citigroup.

    • Gulfport Energy (GPOR): Upgraded from Hold to Buy at Tudor Pickering.

    • MEG Energy (MEG.TO): Upgraded from Sector Perform to Outperform at RBC and from Tender to Hold at GMP Securities.

    • STEP energy Services (STEP): Upgraded from Outperform to Strong Buy at Raymond James.

    • Valero Energy (VLO): Upgraded from Neutral to Outperform at Macquarie.

    DOWNGRADES

    • Baytex Energy (BTE.TO): Downgraded from Outperform to Neutral at Macquarie.

    • Crescent Point Energy (CPG.TO): Downgraded from Outperform to Neutral at Macquarie.

    • Delek US (DK): Downgraded from Buy to Neutral at Citigroup.

    • Husky Energy (HSE.TO): Downgraded from Outperform to Perform at BMO.

    LATEST ENERGY NEWS

    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
    Weak Chinese data renews hopes for more global stimulus

    Weak Chinese data renews hopes for more global stimulus

    Canadian benchmarks take a haircut on February contract expiry

    Canadian benchmarks take a haircut on February contract expiry