Energy stocks drag markets lower, despite resilience in oil prices

Energy stocks drag markets lower, despite resilience in oil prices

Today's energy market summary:

  • A relatively quiet day in oil markets today, with Brent declining 0.6% and WTI ending the day almost unchanged.
  • Western Canadian Select (WCS) rose 1.3%, as the differential to WTI narrowed by another US$0.50 per barrel.
  • Alberta's AECO gas prices rose 2.9% while Henry Hub declined almost 4%. Gasoline also declined 1.1%.
  • The American Petroleum Institute is forecasting a 6.55 million barrel build in crude oil stockpiles for last week. Official numbers from the Energy Information Administration are due to be released Thursday morning.
  • Venezuelan President Nicolas Maduro cut diplomatic ties with the US, after President Trump referred to Juan Guaido as the interim president of Venezuela. The Trump Administration is considering sanctions against Venezuelan crude, which would be particularly disruptive to Gulf Coast refineries.

Today's equity market action:

  • Equity markets also had a quiet Wednesday, with the S&P 500 rising 0.2% and the TSX falling 0.2%.
  • Energy was once again the worst performing sector on both sides of the border. Losses were spread across all the energy subsectors.

Today's notable energy news:

  • According to Reuters, Husky Energy had more than enough support from MEG Energy shareholders to follow-through with its merger, suggesting the company terminated the deal due to revised valuation metrics. MEG was today's standout performer on the TSX, rising 5.4% on upgrades from TD Securities and Desjardins.
  • CP Rail says it recently struck a $20 million multi-year agreement with Suncor Energy, shipping crude from Edmonton to Vancouver, and another deal with an undisclosed customer to ship refined fuels to Southern Ontario. Crude transport helped give a big boost to the company's fourth quarter revenues, rising 17% y/y to $2 billion.
  • Bellatrix Exploration announced plans to delist its stock from the NYSE at the end of the month. BXE stock is trading well below the minimum US$1 threshold, required to maintain its US listing. The company's listing on the TSX will not be affected, although its Canadian shares are also trading below the $1 threshold.
  • Natural gas production out of the Marcellus and Utica shale in Pennsylvania, Ohio and West Virginia remain curtailed due to Monday's explosion on Enbridge's Texas Eastern pipeline, which significantly cut gas flows to southern Ohio. Enbridge has yet to provide a timeline for damaged sections of the line.
  • According to Reuters, Qatar Petroleum is reportedly in talks to sell a stake in its upcoming LNG expansion projects. Chevron, Eni and Equinor are among new entrants reportedly interested in making an offer. ExxonMobil, Shell, Total and ConocoPhillips already have a foothold in the country's LNG sector. Qatar is the world's largest LNG exporter, with plans to grow capacity by one-third over the next five years.
  • China's CNOOC says it expects six new oil and gas projects to come on line this year, helping it boost production from the current 1.3 million bbl/day to 1.5 million bbl/day by 2021. The new projects are located in Nigeria, the Gulf of Mexico and offshore China.

Today's mergers, earnings, dividends and share buybacks:

  • Crescent Point Energy announced plans to buyback and cancel up to 38 million of its common shares over the next 12 months.
  • Oilfield services provider RPC Inc. reported Q4/2018 revenues of US$377 million, down 12% y/y, due to lower pricing and a decline in activity. Operating profits declined 67% to US$20 million. The company says the recent "significant and unexpected" decline in WTI has created uncertainty in its 2019 outlook.
  • Phillips 66 Partners raised its quarterly dividend to US$0.835 per share, up 5% from the previous quarter and 23% y/y. This is the company's 21st consecutive quarterly increase since its IPO in 2013.
  • Shareholders have approved the merger between EnLink Midstream Partners and EnLink Midstream. The unit-for-unit transaction is intended to simplify the company's corporate structure.
OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$61.14▼0.650.47
 
86.29
WTI$52.62▲0.142.53
 
76.41
CDN LT$46.97▲0.120.83
 
69.32
C5+$48.57▲0.137.04
 
71.40
WCS$42.62▲1.312.59
 
56.21

CRUDE OIL FUTURES CURVES
BRENT
WTI
█ JAN 23   █ JAN 16   █ JAN 9   █ JAN 2   (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
  • MEG Energy (MEG +5.4%)
  • Secure Energy (SES +0.6%)
  • Shawcor (SCL +0.4%)
  • Kelt Exploration (KEL 0%)
  • 12-MO HIGHS
  • None
  • 10-YR HIGHS
  • None
  • GOLDEN CROSSES
  • None
  • TSX BEARISH INDICATORS
    BOTTOM
    5
  • Baytex Energy (BTE -5.6%)
  • Precision Drilling (PD -5.5%)
  • Vermilion Energy (VET -5.3%)
  • Keyera (KEY -4.6%)
  • Ensign Energy Svcs (ESI -4.2%)
  • 12-MO LOWS
  • Peyto Exploration (PEY -2.8%)
  • 10-YR LOWS
  • Peyto Exploration (PEY -2.8%)
  • DEATH CROSSES
  • Parkland Fuel (PKI -2.1%)
  • COMPANY TICKER CLOSE %CHG L 52WK H CHART
    INTEGRATED
    Suncor EnergySU41.51▼-1.535.53
     
    55.47D   W
    Imperial OilIMO36.51▼-0.133.43
     
    44.91D   W
    Husky EnergyHSE15.88▼-3.113.33
     
    22.99D   W
    MIDSTREAM
    EnbridgeENB47.57▼-0.137.36
     
    49.46D   W
    TransCanadaTRP54.84▼-1.047.90
     
    59.90D   W
    Pembina PipelinePPL44.11▼-0.937.60
     
    47.84D   W
    Inter PipelineIPL20.69▼-2.318.60
     
    25.82D   W
    Keyera KEY26.32▼-4.624.05
     
    38.91D   W
    Gibson EnergyGEI19.28▼-1.115.68
     
    23.32D   W
    LARGE CAP E&P
    Cdn Natural ResCNQ34.25▼-0.330.11
     
    49.08D   W
    Cenovus EnergyCVE10.12▼-2.28.74
     
    14.84D   W
    EncanaECA9.01▼-0.26.90
     
    18.54D   W
    TourmalineTOU18.25▼-0.815.84
     
    26.19D   W
    Vermilion EnergyVET30.75▼-5.326.67
     
    50.46D   W
    SERVICES
    Pason SystemsPSI20.66▼-0.216.05
     
    24.57D   W
    EnerflexEFX17.21▼-0.613.55
     
    18.72D   W
    Mullen Group MTL12.18▼-1.211.39
     
    16.93D   W
    ShawcorSCL19.47▲0.415.11
     
    29.50D   W
    Secure EnergySES7.98▲0.66.25
     
    9.82D   W
    REFINING & MARKETING
    Parkland FuelPKI36.58▼-2.127.36
     
    47.45D   W
    S&P 500 ENERGY STOCKS
    SPX BULLISH INDICATORS
    TOP 5
  • Marathon Petro (MPC +0.2%)
  • ConocoPhillips (COP +0.2%)
  • 12-MO HIGHS
  • None
  • 10-YR HIGHS
  • None
  • GOLDEN CROSSES
  • None
  • SPX BEARISH INDICATORS
    BOTTOM
    5
  • EQT Corp (EQT -4.7%)
  • Noble Energy (NBL -3.9%)
  • Baker Hughes (BHGE -3.3%)
  • Valero Energy (VLO -2.7%)
  • Ntl-Oilwell Varco (NOV -2.7%)
  • 12-MO LOWS
  • None
  • 10-YR LOWS
  • None
  • DEATH CROSSES
  • None
  • COMPANY TICKER CLOSE %CHG L 52WK H CHART
    INTEGRATED
    Exxon MobilXOM71.30▼-0.864.65
     
    89.30D   W
    ChevronCVX111.39▼-0.9100.22
     
    132.67D   W
    MIDSTREAM
    Kinder MorganKMI17.24▼-2.314.62
     
    19.71D   W
    Williams CoWMB25.82▼-1.320.36
     
    33.67D   W
    ONEOKOKE62.55▼-0.150.26
     
    71.99D   W
    LARGE CAP E&P
    ConocoPhillipsCOP65.86▲0.250.18
     
    80.24D   W
    EOG ResourcesEOG96.57▼-0.382.04
     
    133.53D   W
    Occidental PetroOXY64.57▼-0.856.83
     
    87.67D   W
    Anadarko PetroAPC45.88▼-2.640.40
     
    76.70D   W
    Pioneer Natural ResPXD137.42▼-1.8119.08
     
    213.40D   W
    SERVICES
    SchlumbergerSLB43.31▼-1.534.99
     
    80.35D   W
    HalliburtonHAL31.05▼-0.724.70
     
    57.86D   W
    Baker HughesBHGE22.98▼-3.320.09
     
    37.76D   W
    Ntl-Oilwell VarcoNOV28.74▼-2.724.27
     
    49.08D   W
    TechnipFMCFTI22.58▼-1.918.20
     
    34.97D   W
    REFINERS
    Marathon PetroMPC64.85▲0.254.29
     
    88.45D   W
    Phillips 66PSX92.63▼-0.478.44
     
    123.97D   W
    Valero EnergyVLO79.78▼-2.768.81
     
    126.98D   W
    HollyFrontierHFC54.21▼-0.342.42
     
    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.A58.91▼-1.255.04
     
    73.86D   W
    TotalTOT52.95▼-1.049.70
     
    65.69D   W
    BPBP40.12▲0.136.15
     
    47.83D   W
    EniE32.59▼-1.129.75
     
    40.15D   W
    EquinorEQNR21.86▼-1.319.95
     
    28.93D   W
    ANALYST RATINGS

    UPGRADES

    • Callon Petroleum (CPE): Upgraded from Neutral to Buy at Citigroup.

    • MEG Energy (MEG.TO): Upgraded from Hold to Buy at Desjardins and TD Securities.

    DOWNGRADES

    • Equinor (EQNR): Downgraded from Neutral to Underperform at Credit Suisse.

    • Oasis Petroleum (OAS): Downgraded from Buy to Neutral at Citigroup.

    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
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