WCS discount falls below US$9 for the first time since spring 2017
Today's energy market summary:
- Oil prices continue to tread water, gaining over 2% on Tuesday, and reversing most of Monday's losses. Both Brent and WTI have been stuck in a very narrow trading range for much of January.
- The heavy oil discount narrowed significantly on Tuesday, ending the day just below US$9/bbl. The discounts on Canadian Light and Edmonton Condensate (C5+) were unchanged.
- Heating oil was the big winner in energy commodities, rising over 3% for the day. Gasoline and US natural gas prices also gained over 1%.
Today's equity market action:
- Except for the Nasdaq, most US markets were roughly unchanged on Tuesday.
- The S&P 500 dipped 0.2%, while the TSX gained 0.6%, thanks to higher commodity prices.
- The Canadian energy sector gained almost 1%, with midstream stocks and producers leading to the upside. In US markets, the energy sector rose 0.3%.
Today's notable energy news:
- TransCanada has hired RBC Capital Markets to sell up to 75% of its $6.2 billion Coastal GasLink project, a natural gas gathering network in northern BC which will supply the LNG Canada export terminal in Kitimat. The project faces major opposition from various special interest groups, while its provincial approval is still under review by the National Energy Board.
- CN Rail reported a 50% increase in revenues from the transport of petroleum and chemicals, rising to $815 million in the fourth quarter. Crude oil shipments rose to 232,000 bbl/day in Q4 and 133,000 bbl/day for the full year 2018. The company says demand remains strong, but it will be negatively impacted in Q1 by the province's mandated production cuts. CN also boosted its dividend 18% and announced plans to buyback 22 million shares.
- ExxonMobil confirmed a major expansion of its Beaumont Refinery, adding 250,000 bbl/day of light oil processing capacity. The company says a third Crude Distillation Unit will be operational by 2022, increasing its ability to process light oil from the Permian. Once completed, total capacity at Beaumont rises to about 620,000 bbl/day, making it the largest refinery in the US.
- According to Reuters, Chevron has agreed to buy Petrobras' 112,000 bbl/day Pasadena refinery in Texas. Petrobras bought the refinery in 2008 and has since invested more than US$1 billion in upgrades. The company put the facility up for sale early last year as part of its US$21 billion divestiture program. Neither Chevron or Petrobras have confirmed the deal.
- UK offshore driller firm Ensco upped its all-stock bid for Houston-based Rowan Companies by 24% over its original offer. The company says the merger will save it US$165 million annually in expenses. Both boards have approved the deal, which is still subject to shareholder approval.
- CNOOC announced the discovery of natural gas and condensate in the Glengorm field, located in the UK North Sea. The field is estimated to hold 250 million barrels of oil equivalent, which would make it the largest UK discovery in more than a decade. The company plans more drilling to determine the productivity of the reservoir. The field is jointly owned with Total and Euroil.
|CURRENCIES & YIELDS|
|Suncor Energy||SU||42.50||▲0.7||35.53||55.47||D W|
|Imperial Oil||IMO||36.60||▼-0.4||33.43||44.91||D W|
|Husky Energy||HSE||15.58||▲0.1||13.33||22.99||D W|
|Pembina Pipeline||PPL||45.67||▲0.6||37.60||47.84||D W|
|Inter Pipeline||IPL||21.20||▲0.8||18.60||25.66||D W|
|Gibson Energy||GEI||19.52||▲0.4||15.68||23.32||D W|
|LARGE CAP E&P|
|Cdn Natural Res||CNQ||35.33||▲1.6||30.11||49.08||D W|
|Cenovus Energy||CVE||10.46||▲1.5||8.74||14.84||D W|
|Vermilion Energy||VET||31.76||▲2.2||26.67||49.67||D W|
|Pason Systems||PSI||20.19||▼-1.4||16.05||24.57||D W|
|Mullen Group||MTL||12.09||▼-0.3||11.39||16.93||D W|
|Secure Energy||SES||7.75||▼-1.8||6.25||9.51||D W|
|REFINING & MARKETING|
|Parkland Fuel||PKI||35.80||▼-0.3||27.36||47.45||D W|
|Exxon Mobil||XOM||71.51||▲0.4||64.65||89.30||D W|
|Kinder Morgan||KMI||18.05||▲0.9||14.62||18.83||D W|
|Williams Co||WMB||26.68||▲0.4||20.36||32.47||D W|
|LARGE CAP E&P|
|EOG Resources||EOG||98.87||▲0.8||82.04||133.53||D W|
|Occidental Petro||OXY||66.48||▲0.6||56.83||87.67||D W|
|Anadarko Petro||APC||46.46||▲0.0||40.40||76.70||D W|
|Pioneer Natural Res||PXD||140.20||▲0.4||119.08||213.40||D W|
|Baker Hughes||BHGE||23.16||▲0.8||20.09||37.76||D W|
|Ntl-Oilwell Varco||NOV||29.78||▼-0.6||24.27||49.08||D W|
|Marathon Petro||MPC||64.14||▲0.7||54.29||88.45||D W|
|Phillips 66||PSX||93.35||▲0.9||78.44||123.97||D W|
|Valero Energy||VLO||81.14||▲0.1||68.81||126.98||D W|
Concho Resources (CXO): Upgraded from Equal Weight to Overweight at Stephens.
Parsley Energy (PE): Upgraded from Equal Weight to Overweight at Stephens.
RPC (RES): Upgraded from Neutral to Buy at Seaport Global Securities.
Targa Resources (TRGP): Upgraded from Neutral to Buy at Seaport Global Securities.
Gulfport Energy (GPOR): Downgraded from Buy to Neutral at Guggenheim.
Hess (HES): Downgraded from Overweight to Equal Weight at Stephens.
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