Falling equity markets drag oil prices lower
Today's energy market summary:
- Oil prices followed equity markets lower on Monday, on renewed concerns over the health of the Chinese economy.
- Brent and WTI declined about 3%, with Brent dipping below the US$60 mark for the fist time in two weeks.
- In Canadian energy markets, the discount on Canadian Light narrowed by US$1.40, falling to US$4.25/bbl. The discount on Canadian heavy widened slightly, ending Monday just below US$10.
- Henry Hub natural gas prices tumbled 6.5%, returning to the lows of last September.
- Gasoline and heating oil also declined, falling about 4% and 3%, respectively.
- The Trump Administration announced sanctions against Venezuela's state-owned oil producer PDVSA, in hopes of pressuring President Maduro into stepping down. The government has frozen all US-based assets belonging to PDVSA, including its largest asset, refiner Citgo Petroleum. For now, the US has backed down on threats to impose sanctions on Venezuelan crude exports.
Today's equity market action:
- Equity markets opened sharply lower on Monday after bellwethers Caterpillar and Nvidia both missed earnings expectations, due to slowing demand in China.
- European markets gave up 1%, due in part to a rising Euro, while Chinese markets were mostly unchanged. Most US indices also declined about 1% for the day.
- The Dow Jones Industrial sank 200 points, while the S&P 500 gave up 0.8%, with technology stocks posting the largest losses. In Toronto, the TSX managed a 0.1% gain, helped by a good showing among gold and cannabis stocks.
- The energy sectors declined 0.6% in Canada and 1% in US markets. Canadian midstream stocks had a good day, but most other subsectors ended Monday in the red.
Today's other notable energy news:
- Black Diamond Group has been cleared to proceed on its previously announced contract with West Moberly First Nations to provide a 908-bed workcamp for the Coastal GasLink Pipeline Project. The $42.5 million contract is expected to last 27 months. Aside from Coastal GasLink, Black Diamond was also awarded a 304-bed contract in Kitimat for initial infrastructure work.
- According to Reuters, ExxonMobil has approved a major expansion of its 365,000 bbl/day Beaumont Refinery in Texas, adding a third processing plant and almost doubling the size of the facility. The company has yet to confirm or deny the rumours, or provide any capital estimates.
- Baker Hughes says it plans to reduce its CO₂ emissions 50% by 2030, achieving "net-zero CO₂ equivalent" emissions by 2050. The company also committed to assisting its customers with reducing their own carbon footprints.
- Italy’s Eni and Austria’s OMV have each agreed to pay a combined US$5.8 billion for 35% a stake in Abu Dhabi National Oil Company’s (ADNOC) refining business, and establishing a new trading arm, to be jointly owned by the three partners. The deal boosts ADNOC’s access to European markets.
- Saudi Aramco announced plans to invest up to US$1.6 billion for a 20% stake in South Korean refiner Hyundai Oilbank. The deal is expected to boost Aramco's market share in Asia and Africa.
- Oilfield services firm McDermott International was awarded a "sizeable" contract by LLOG Exploration for a deepwater project in the Gulf of Mexico.
- Hi-Crush Partners announced a long-term agreement with CNX Resources to supply frac sand for its operations in the Marcellus and Utica shale basins. Financial terms of the deal were not disclosed.
- Marathon Petroleum boosted its quarterly dividend 15% to US$0.53 per share.
|CURRENCIES & YIELDS|
|Suncor Energy||SU||42.20||▼-0.4||35.53||55.47||D W|
|Imperial Oil||IMO||36.74||▼-0.7||33.43||44.91||D W|
|Husky Energy||HSE||15.57||▼-2.6||13.33||22.99||D W|
|Pembina Pipeline||PPL||45.41||▲1.2||37.60||47.84||D W|
|Inter Pipeline||IPL||21.04||▲0.1||18.60||25.66||D W|
|Gibson Energy||GEI||19.44||▲0.4||15.68||23.32||D W|
|LARGE CAP E&P|
|Cdn Natural Res||CNQ||34.76||▼-0.4||30.11||49.08||D W|
|Cenovus Energy||CVE||10.31||▲0.3||8.74||14.84||D W|
|Vermilion Energy||VET||31.07||▲0.5||26.67||49.67||D W|
|Pason Systems||PSI||20.47||▲0.5||16.05||24.57||D W|
|Mullen Group||MTL||12.13||▲0.3||11.39||16.93||D W|
|Secure Energy||SES||7.89||▼-0.8||6.25||9.71||D W|
|REFINING & MARKETING|
|Parkland Fuel||PKI||35.90||▼-1.2||27.36||47.45||D W|
|Exxon Mobil||XOM||71.24||▼-0.7||64.65||89.30||D W|
|Kinder Morgan||KMI||17.89||▲0.9||14.62||18.99||D W|
|Williams Co||WMB||26.58||▼-0.3||20.36||32.75||D W|
|LARGE CAP E&P|
|EOG Resources||EOG||98.10||▼-1.0||82.04||133.53||D W|
|Occidental Petro||OXY||66.08||▼-0.7||56.83||87.67||D W|
|Anadarko Petro||APC||46.45||▼-0.9||40.40||76.70||D W|
|Pioneer Natural Res||PXD||139.71||▼-0.4||119.08||213.40||D W|
|Baker Hughes||BHGE||22.98||▼-2.2||20.09||37.76||D W|
|Ntl-Oilwell Varco||NOV||29.95||▼-1.6||24.27||49.08||D W|
|Marathon Petro||MPC||63.72||▼-0.6||54.29||88.45||D W|
|Phillips 66||PSX||92.50||▼-0.6||78.44||123.97||D W|
|Valero Energy||VLO||81.03||▼-1.4||68.81||126.98||D W|
Diamond Offshore Drilling (DO): Upgraded from Hold to Buy at Pareto Securities.
Noble (NE): Upgraded from Hold to Buy at Pareto Securities.
C&J Energy Services (CJ): Downgraded from Buy to Hold at Jefferies Financial.
DCP Midstream (DCP): Downgraded from Buy to Hold at Jefferies Financial.
Magellan Midstream Partners (MMP): Downgraded from Buy to Hold at Jefferies Financial.
Phillips 66 Partners (PSXP): Downgraded from Buy to Hold at Jefferies Financial.
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