Energy stocks rally despite continued weakness in oil prices

Energy stocks rally despite continued weakness in oil prices

Today's energy market summary:

  • Except for natural gas, most commodities retreated on Monday, as the US dollar continues to strengthen.
  • Brent declined 1%, while WTI and Canadian Light dipped 0.6%.
  • WCS declined 1.2% as the differential to WTI widened slightly.
  • Gasoline prices sank 2%, while heating oil fell about 1%.
  • After last week's 5% drop, Henry Hub prices gained over 2% on Monday.

Today in equities, treasuries and currencies:

  • Bond yields recovered some of last week's losses, including the US, Canada, the UK and Germany.
  • The US dollar gained another 0.5%, now returning to the highs of mid-December.
  • The Euro, pound and yen declined about 0.6%, while the loonie gave back about 0.2%.
  • North American markets were little changed on Monday, including the NYSE and NASDAQ.
  • Overnight, markets in Europe and China mostly ended the day in the positive, averaging a gain of about 1%.
  • The TSX declined 0.4%, dragged lower by materials and industrial stocks.
  • The S&P 500 was unchanged, despite gains in the industrials and energy sectors.
  • The Canadian energy sector rose 0.8% while the US energy sector rose 0.5%. Energy service providers were the best performing stocks on both sides of the border.

Today's notable energy news:

  • TransCanada has declared force majeure on sections of its 590,000 bbl/day Keystone pipeline, after a leak was discovered in Missouri last week. The closure affects the segment between Steele City, Nebraska, and Patoka, Illinois. The cause of the spill is still unknown and the company has not provided a timeline for restart.
  • US federal regulators have approved TransCanada’s request to put more sections of its 880 MMcf/day Gulf XPress natural gas pipeline into service. The US$600 million expansion includes seven new compressor stations in the states of Kentucky, Mississippi and Tennessee.
  • Phillips 66's 330,000 bbl/day Wood River refinery in Illinois was disrupted on Sunday, after fire broke out in one of its crude distillation units (CDU), injuring one worker. The same refinery was hit by a cold snap at the end of January, and was in the process of returning to normal operations. The 120,000 bbl/day CDU remains offline. Wood River is jointly owned with Cenovus Energy.
  • Phillips 66 and Kinder Morgan have launched open season on their Gray Oak Pipeline, which would transport 900,000 bb/day of crude and condensate from the Permian Basin to export terminals near Houston.
  • BP announced the start of gas production from the second stage of production of its West Nile Delta project offshore Egypt. A third phase of expansion is expected to begin by the end of this year, bringing total production capacity to 1.4 Bcf/day.

Today's Q4/2018 earnings, reserves and 2019 guidance updates:

  • Obsidian Energy says it will defer four wells due to the Alberta's curtailment program, reducing capital expenditures by $20 million in the first half of 2019. Full year 2019 production guidance was reduced by 2,250 boe/day to about 28,500 boe/day, while capital spend was unchanged at $120 million. Total proved plus probable reserves was estimated at 125 million barrels of oil equivalent at the end of 2018, weighted more than 50% liquids.
  • PrairieSky Royalty averaged 23,458 boe/day in 2018, down about 8% from the previous year. Funds from operations declined 20% to $230 million, primarily due to lower natural gas prices. Full year profits declined 35% to $79 million. PrairieSky expects crude oil volumes to be impacted by about 200 bbl/day in Q1 due to the province's production caps.
  • DCP Midstream reported a Q4 profit of US$94 million, up almost 60% y/y, while full-year 2018 earnings rose 30% to US$298 million. The company expects to spend US$700 to US$900 million this year in growth and maintenance capital.
OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$61.51▼1.050.47
 
86.29
WTI$52.41▼0.642.53
 
76.41
CDN LT$48.79▼0.620.83
 
69.32
C5+$49.76▼1.237.04
 
71.40
WCS$42.57▼1.212.59
 
56.21

CRUDE OIL FUTURES CURVES
BRENT
WTI
█ FEB 11   █ FEB 4   █ JAN 28   █ JAN 21   (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 +5%)
  • Ensign Energy Svcs (ESI +3.4%)
  • Shawcor (SCL +3.2%)
  • CES Energy (CEU +2.9%)
  • Tourmaline (TOU +2.2%)
  • 12-MO HIGHS
  • None
  • 10-YR HIGHS
  • None
  • GOLDEN CROSSES
  • None
  • TSX BEARISH INDICATORS
    BOTTOM
    5
  • Crescent Point (CPG -4.7%)
  • MEG Energy (MEG -2.3%)
  • Seven Generations (VII -1.7%)
  • ARC Resources (ARX -1.6%)
  • Enerplus (ERF -1%)
  • 12-MO LOWS
  • Crescent Point (CPG -4.7%)
  • 10-YR LOWS
  • Crescent Point (CPG -4.7%)
  • DEATH CROSSES
  • None
  • COMPANY TICKER CLOSE %CHG L 52WK H CHART
    INTEGRATED
    Suncor EnergySU42.99▲0.435.53
     
    55.47D   W
    Imperial OilIMO35.62▲0.433.43
     
    44.91D   W
    Husky EnergyHSE15.16▲1.413.33
     
    22.99D   W
    MIDSTREAM
    EnbridgeENB48.30▲0.837.36
     
    49.70D   W
    TransCanadaTRP54.64▼-1.047.90
     
    59.51D   W
    Pembina PipelinePPL46.85▼-0.537.60
     
    47.84D   W
    Inter PipelineIPL21.10▲0.818.60
     
    25.66D   W
    Keyera KEY27.84▼-0.624.05
     
    38.91D   W
    Gibson EnergyGEI19.59▼-0.115.68
     
    23.32D   W
    LARGE CAP E&P
    Cdn Natural ResCNQ34.70▲1.630.11
     
    49.08D   W
    Cenovus EnergyCVE10.04▲1.18.74
     
    14.84D   W
    EncanaECA8.12▲0.76.90
     
    18.54D   W
    TourmalineTOU18.55▲2.215.84
     
    26.19D   W
    Vermilion EnergyVET31.42▲0.926.67
     
    49.67D   W
    SERVICES
    Pason SystemsPSI19.80▲1.016.05
     
    24.57D   W
    EnerflexEFX16.72▼-0.213.55
     
    18.72D   W
    Mullen Group MTL11.72▲1.811.26
     
    16.93D   W
    ShawcorSCL20.25▲3.215.11
     
    28.89D   W
    Secure EnergySES7.83▲1.66.25
     
    8.91D   W
    REFINING & MARKETING
    Parkland FuelPKI37.30▲0.327.36
     
    47.45D   W
    S&P 500 ENERGY STOCKS
    SPX BULLISH INDICATORS
    TOP 5
  • Concho Res (CXO +3.3%)
  • Cimarex Energy (XEC +2.3%)
  • Schlumberger (SLB +2.1%)
  • Hess Corp (HES +2.1%)
  • Devon Energy (DVN +2.1%)
  • 12-MO HIGHS
  • None
  • 10-YR HIGHS
  • None
  • GOLDEN CROSSES
  • None
  • SPX BEARISH INDICATORS
    BOTTOM
    5
  • Marathon Petro (MPC -1.6%)
  • Valero Energy (VLO -1%)
  • Newfield Expl (NFX -0.6%)
  • Williams Co (WMB -0.6%)
  • Chevron (CVX -0.5%)
  • 12-MO LOWS
  • None
  • 10-YR LOWS
  • None
  • DEATH CROSSES
  • None
  • COMPANY TICKER CLOSE %CHG L 52WK H CHART
    INTEGRATED
    Exxon MobilXOM74.10▲0.264.65
     
    87.36D   W
    ChevronCVX116.95▼-0.5100.22
     
    131.08D   W
    MIDSTREAM
    Kinder MorganKMI18.27▲1.414.62
     
    18.67D   W
    Williams CoWMB26.72▼-0.620.36
     
    32.22D   W
    ONEOKOKE65.05▲0.150.26
     
    71.99D   W
    LARGE CAP E&P
    ConocoPhillipsCOP66.74▲0.750.18
     
    80.24D   W
    EOG ResourcesEOG94.21▲1.982.04
     
    133.53D   W
    Occidental PetroOXY64.84▼-0.256.83
     
    87.67D   W
    Anadarko PetroAPC42.56▲1.740.40
     
    76.70D   W
    Pioneer Natural ResPXD137.65▲1.4119.08
     
    213.40D   W
    SERVICES
    SchlumbergerSLB43.69▲2.134.99
     
    75.43D   W
    HalliburtonHAL30.20▲1.724.70
     
    54.91D   W
    Baker HughesBHGE24.82▲0.920.09
     
    37.76D   W
    Ntl-Oilwell VarcoNOV28.83▲1.724.27
     
    49.08D   W
    TechnipFMCFTI22.71▲1.618.20
     
    34.39D   W
    REFINERS
    Marathon PetroMPC61.72▼-1.654.29
     
    88.45D   W
    Phillips 66PSX94.23▲0.878.44
     
    123.97D   W
    Valero EnergyVLO83.34▼-1.068.81
     
    126.98D   W
    HollyFrontierHFC54.96▲1.942.42
     
    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.A62.47▼-0.755.04
     
    73.86D   W
    TotalTOT55.15▼0.049.70
     
    65.69D   W
    BPBP42.21▼-0.736.28
     
    47.83D   W
    EniE33.17▲0.529.75
     
    40.15D   W
    EquinorEQNR22.31▼-1.319.95
     
    28.93D   W
    ANALYST RATINGS

    UPGRADES

    • None

    DOWNGRADES

    • Cimarex Energy (XEC): Downgraded from Positive to Neutral at Susquehanna Bancshares.

    • Equinor (EQNR): Downgraded from Overweight to Neutral at Piper Jaffray.

    • Phillips 66 Partners (PSXP): Downgraded from Buy to Hold at Stifel Nicolaus.

    • Sasol (SSL): Downgraded from Buy to Neutral at BofA.

    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 get a boost on hopes for steeper OPEC cuts

    Oil prices get a boost on hopes for steeper OPEC cuts

    Energy stocks drift lower as US dollar slowly creeps higher

    Energy stocks drift lower as US dollar slowly creeps higher

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