Oil prices get a lift from rising stock markets, falling US dollar and flatlining US output

Oil prices get a lift from rising stock markets, falling US dollar and flatlining US output

Today's energy market summary:

  • Oil prices got a lift on Wednesday due to a softer US dollar, a smaller-than-expected build in crude inventories, and flatlining US oil output.
  • According to the Energy Information Administration, the US added almost 1 million barrels of crude stockpiles, mainly due to a slowdown in refinery demand. US output was unchanged for the second week in a row.
  • In Canadian energy markets, the discount on Canadian Light and Edmonton Condensate narrowed on Wednesday, sending prices higher by 2.4% and 3%, respectively.
  • Gasoline and distillate stockpiles dropped by over 3 million barrels, boosting gasoline prices 2.3%.

Today's equity market action:

  • Equity markets were bolstered by a better-than-expected outlook on the Chinese economy by Apple, and expectations for a "slowing pace" of rate hikes by the US Federal Reserve.
  • The Nasdaq was today's best performer, rising 2.2%. The Dow Jones Industrial added over 400 points (+1.8%).
  • The S&P 500 rose 1.6%, with gains led by more offensive technology and discretionary stocks.
  • US Fed Chair Jerome Powell held interest rates unchanged today, but stressed the move was not politically motivated.
  • US 10-year bond yields declined, sending the US dollar down 0.5%.
  • In Toronto, the TSX was roughly unchanged, dragged lower by a decline in discretionary, staples and utility stocks.
  • Energy stocks had a relatively good day, gaining about 1% on both sides of the border.
  • Except for Canadian midstream stocks, gains were seen across most energy subsectors.

Today's midstream news:

  • Marathon Pipe Line has launched binding open season on its planned reversal of the Capline system. The line currently runs from Louisiana to Illinois, but operates well below its 1.2 million bbl/day design capacity due to low demand. Reversal will allow for more Canadian crude to be shipped from the Midwest region into the Gulf Coast. Pending sufficient interest and all regulatory approvals, the reversed line should be in service by the end of 2020. The line is jointly owned with Plains All American.
  • ExxonMobil, Plains All American and Lotus Midstream have partnered up on the Wink to Webster Pipeline Joint Venture. The new line will transport more than 1 million bbl/day of crude oil and condensate from Permian Basin in West Texas to the Texas Gulf Coast. The line is expected to be in service by 2021.
  • Magellan Midstream and Navigator Energy have extended open season on their Voyager pipeline, which will transport light crude oil and condensate 500 miles from Cushing, Oklahoma to Houston, Texas. The line will have an initial capacity of at least 300,000 bbl/day, and is planned to be in service by the end of 2020.

Today's other notable energy news:

  • ExxonMobil announced plans for a multi-billion dollar integrated gas-for-power project in Vietnam, in partnership with state-owned PetroVietnam. The gas will be sourced from an offshore field, transported to shore and pipelined to third-party power plants. A final investment decision is expected sometime next year.
  • The United Steelworkers union, representing some 30,000 US refinery workers, has rejected an initial offer from Royal Dutch Shell, who is leading negotiations on behalf of US refiners. The union would like to see an 8% raise and extension of their existing contract, which expires this year. The union's last strike was in 2015, affecting 12 refineries and three chemical plants.
  • Chevron confirmed the purchase of Petrobras's Pasadena Refinery in Texas for US$350 million, excluding working capital. The refinery has a light oil processing capacity of 110,000 bbl/day. The company also boosted its quarterly dividend for the 32nd consecutive year in a row, rising to US$1.19 per share in March.
  • Hess reported a net loss of US$4 million in the fourth quarter, down from a US$2.7 billion loss posted the same time last year. Excluding Libya, the company produced 267,000 boe/day in Q4, up 5% y/y, including 58,000 boe/day from divested assets. Last year's production growth was primarily driven by the Bakken region and the Gulf of Mexico.
  • Following in the footsteps of BP last week, Shell has agreed to acquire Greenlots, a California-based electric vehicle software and services provider. Financial terms of the deal were not disclosed.
OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$61.65▲0.550.47
 
86.29
WTI$54.23▲1.742.53
 
76.41
CDN LT$50.23▲2.420.83
 
69.32
C5+$50.73▲3.037.04
 
71.40
WCS$44.73▲0.612.59
 
56.21

CRUDE OIL FUTURES CURVES
BRENT
WTI
█ JAN 30   █ JAN 23   █ JAN 16   █ JAN 9   (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
  • Precision Drilling (PD +13.9%)
  • CES Energy (CEU +7%)
  • Whitecap Res (WCP +4.4%)
  • Baytex Energy (BTE +4.2%)
  • Ensign Energy Svcs (ESI +3.9%)
  • 12-MO HIGHS
  • None
  • 10-YR HIGHS
  • None
  • GOLDEN CROSSES
  • None
  • TSX BEARISH INDICATORS
    BOTTOM
    5
  • Nuvista Energy (NVA -2.4%)
  • Keyera (KEY -1.3%)
  • Altagas (ALA -0.8%)
  • TransCanada (TRP -0.8%)
  • Enbridge (ENB -0.5%)
  • 12-MO LOWS
  • None
  • 10-YR LOWS
  • None
  • DEATH CROSSES
  • None
  • COMPANY TICKER CLOSE %CHG L 52WK H CHART
    INTEGRATED
    Suncor EnergySU42.52▲0.135.53
     
    55.47D   W
    Imperial OilIMO37.27▲1.833.43
     
    44.91D   W
    Husky EnergyHSE15.59▲0.113.33
     
    22.99D   W
    MIDSTREAM
    EnbridgeENB48.09▼-0.537.36
     
    48.50D   W
    TransCanadaTRP55.61▼-0.847.90
     
    59.51D   W
    Pembina PipelinePPL46.57▲2.037.60
     
    47.84D   W
    Inter PipelineIPL21.22▲0.118.60
     
    25.66D   W
    Keyera KEY27.87▼-1.324.05
     
    38.91D   W
    Gibson EnergyGEI19.60▲0.415.68
     
    23.32D   W
    LARGE CAP E&P
    Cdn Natural ResCNQ35.74▲1.230.11
     
    49.08D   W
    Cenovus EnergyCVE10.54▲0.88.74
     
    14.84D   W
    EncanaECA9.20▲0.96.90
     
    18.54D   W
    TourmalineTOU18.58▲2.515.84
     
    26.19D   W
    Vermilion EnergyVET32.09▲1.826.67
     
    49.67D   W
    SERVICES
    Pason SystemsPSI20.60▲2.016.05
     
    24.57D   W
    EnerflexEFX17.06▲0.413.55
     
    18.72D   W
    Mullen Group MTL12.17▲1.111.39
     
    16.93D   W
    ShawcorSCL19.92▼-0.515.11
     
    28.89D   W
    Secure EnergySES7.93▲2.36.25
     
    9.23D   W
    REFINING & MARKETING
    Parkland FuelPKI36.53▲2.027.36
     
    47.45D   W
    S&P 500 ENERGY STOCKS
    SPX BULLISH INDICATORS
    TOP 5
  • Helmerich & Payne (HP +5.5%)
  • Hess Corp (HES +4%)
  • Baker Hughes (BHGE +3.4%)
  • HollyFrontier (HFC +3.3%)
  • Concho Res (CXO +3.2%)
  • 12-MO HIGHS
  • None
  • 10-YR HIGHS
  • None
  • GOLDEN CROSSES
  • None
  • SPX BEARISH INDICATORS
    BOTTOM
    5
  • Cabot O&G (COG -1.1%)
  • 12-MO LOWS
  • None
  • 10-YR LOWS
  • None
  • DEATH CROSSES
  • None
  • COMPANY TICKER CLOSE %CHG L 52WK H CHART
    INTEGRATED
    Exxon MobilXOM72.29▲1.164.65
     
    89.25D   W
    ChevronCVX113.01▲1.1100.22
     
    131.08D   W
    MIDSTREAM
    Kinder MorganKMI18.09▲1.314.62
     
    18.67D   W
    Williams CoWMB27.02▲1.320.36
     
    32.22D   W
    ONEOKOKE64.20▲0.950.26
     
    71.99D   W
    LARGE CAP E&P
    ConocoPhillipsCOP65.69▲0.650.18
     
    80.24D   W
    EOG ResourcesEOG99.45▲0.682.04
     
    133.53D   W
    Occidental PetroOXY66.97▲0.756.83
     
    87.67D   W
    Anadarko PetroAPC47.83▲3.040.40
     
    76.70D   W
    Pioneer Natural ResPXD141.51▲0.9119.08
     
    213.40D   W
    SERVICES
    SchlumbergerSLB45.00▲2.334.99
     
    75.79D   W
    HalliburtonHAL31.57▲2.324.70
     
    54.91D   W
    Baker HughesBHGE23.94▲3.420.09
     
    37.76D   W
    Ntl-Oilwell VarcoNOV29.89▲0.424.27
     
    49.08D   W
    TechnipFMCFTI23.14▲0.518.20
     
    34.39D   W
    REFINERS
    Marathon PetroMPC65.33▲1.954.29
     
    88.45D   W
    Phillips 66PSX94.53▲1.378.44
     
    123.97D   W
    Valero EnergyVLO83.28▲2.668.81
     
    126.98D   W
    HollyFrontierHFC55.90▲3.342.42
     
    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.A59.56▲1.255.04
     
    73.86D   W
    TotalTOT54.17▲0.249.70
     
    65.69D   W
    BPBP40.67▲1.236.15
     
    47.83D   W
    EniE33.65▲1.129.75
     
    40.15D   W
    EquinorEQNR22.59▲1.819.95
     
    28.93D   W
    ANALYST RATINGS

    UPGRADES

    • MEG Energy (MEG.TO): Upgraded from Equal Weight to Overweight at Morgan Stanley.

    • PDC Energy (PDCE): Upgraded from Equal Weight to Overweight at Capital One.

    • Precision Drilling (PD.TO): Upgraded from Outperform to Strong Buy at Raymond James.

    DOWNGRADES

    • None

    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
    Oil prices begin January with a bang, but end the month with a whimper

    Oil prices begin January with a bang, but end the month with a whimper

    WCS discount falls below US$9 for the first time since spring 2017

    WCS discount falls below US$9 for the first time since spring 2017