Oil prices and stock markets stumble as trade fears resurface
Today's energy market summary:
- Markets were rattled on Thursday after the Trump Administration warned there remains a "pretty sizeable distance" between the US and China, suggesting a trade agreement may not be reached before the March 1 deadline. The news sent money flowing out of stocks and commodities, and into treasury markets.
- The US benchmark fell 2.5%, while Brent declined almost 2%.
- Canadian light and heavy crude, as well as Edmonton Condensate (C5+), fell about 3%, despite little change in differentials.
- US natural gas prices tumbled 4%, while gasoline fell 2.3%, reversing all of Wednesday's gains. Heating oil also declined 0.6%.
Today's treasury, currency and equity market action:
- Most global bond yields took a hit today, including the US, Canada, UK and Germany.
- The US dollar nudged up another 0.1% on Thursday, while the loonie declined 0.7%.
- Most global markets posted losses for the day, including the US, Japan and the EU.
- The Dow Jones Industrial Average fell 220 points (-0.9%), while the S&P 500 declined almost 1%.
- Utilities were the only bright spot in US markets, rising an average of 1.3%.
- The S&P 500 energy sector was the worst performing sector, declining 2.1% for the day.
- In Toronto, the TSX ended the day unchanged, as a 2.4% drop in energy stocks offset gains in other sectors.
Today's notable energy news:
- Sections of TransCanada's 590,000 bbl/day Keystone pipeline and Enbridge's 150,000 bbl/day Platte pipeline were taken out of service on Thursday to investigate a leak near St. Louis, Missouri. The release was contained to an area of about 4,000 square feet, which is currently being excavated. The size of the spill is still undetermined.
- Williams Co says it delivered a record 15.68 MMBtu of natural gas on January 21 through its Transco interstate pipeline. The Transco network spans 10,000 miles, stretching from South Texas to New York City, providing gas to power plants, LNG export terminals and other customers located along the Eastern Seaboard and Gulf Coast. Five more expansions are expected to begin this year, adding another 1.15 MMBtu of capacity by the end of 2020.
- Total announced a significant natural gas and condensate discovery off the southern coast of South Africa. CEO Patrick Pouyanne told investors the field is "probably quite big," potentially holding around 1 billion barrels of reserves. Total operates the field, which is jointly held with Qatar Petroleum, Canadian Natural Resources and South Africa's Main Street.
Today's Q4/2018 earnings and updates:
- ARC Resources posted a net profit of $160 million in the fourth quarter, more than double the same time last year. Production averaged 136,502 boe/day, up 2% y/y, while funds from operations dipped 6% to $209 million. For the full year 2018, the the company produced a record 132,724 boe/day, at the high end of guidance. ARC also says total proved plus probably reserves increased 5% y/y, to 879 million barrels of oil equivalent at the end of 2018.
- In today's investor update, NuVista Energy says its "production guidance expectations" were exceeded last year and last quarter. Full year 2018 output was estimated at 40,300 boe/day, with Q4 volumes averaging 49,000 boe/day. Full year 2018 capital spend was approximately $340 million, while this year's budget was reduced to about $300 to $325 million. NuVista set a 2019 production guidance of 51,000 to 54,000 boe/day, with more than half of those volumes hedged at a floor price of $79/bbl for WTI and $2/GJ for AECO gas.
- Total revenues at Marathon Petroleum rose over 50% to US$32.5 billion in the fourth quarter, the first full quarter which reflects full integration of assets from Andeavor Energy. Marathon processed about 3 million bbl/day through its refineries in Q4, including about 500,000 bbl/day of discounted Canadian crude. However, the company says any lost barrels from Venezuela will be sourced primary from other South American countries and the Middle East.
- Full-year profits at Total jumped 28% last year, to US$13.6 billion, while cash flow rose 18% to US$26 billion. Production hit an all-time high of 2.8 million boe/day in 2018, up 8% from the previous year. Output is expected to rise another 9% this year, to over 3 million boe/day. The French oil major says it is targeting another US$4.7 billion in cost savings this year, while targeting a capital spending program of about US$15 to US$16 billion. Total also boosted its annual dividend 3%, to €2.56/share.
|CURRENCIES & YIELDS|
|Suncor Energy||SU||43.38||▼-0.9||35.53||55.47||D W|
|Imperial Oil||IMO||35.98||▼-0.6||33.43||44.91||D W|
|Husky Energy||HSE||14.87||▼-4.0||13.33||22.99||D W|
|Pembina Pipeline||PPL||47.37||▼-0.4||37.60||47.84||D W|
|Inter Pipeline||IPL||20.70||▼-0.8||18.60||25.66||D W|
|Gibson Energy||GEI||19.78||▼-1.9||15.68||23.32||D W|
|LARGE CAP E&P|
|Cdn Natural Res||CNQ||34.49||▼-2.1||30.11||49.08||D W|
|Cenovus Energy||CVE||10.09||▼-2.6||8.74||14.84||D W|
|Vermilion Energy||VET||31.63||▼-3.0||26.67||49.67||D W|
|Pason Systems||PSI||19.56||▼-2.2||16.05||24.57||D W|
|Mullen Group||MTL||11.75||▼-3.8||11.26||16.93||D W|
|Secure Energy||SES||7.66||▼-3.0||6.25||8.91||D W|
|REFINING & MARKETING|
|Parkland Fuel||PKI||37.04||▼-1.3||27.36||47.45||D W|
|Exxon Mobil||XOM||74.68||▼-0.8||64.65||87.36||D W|
|Kinder Morgan||KMI||17.96||▼-0.6||14.62||18.67||D W|
|Williams Co||WMB||26.68||▼-1.4||20.36||32.22||D W|
|LARGE CAP E&P|
|EOG Resources||EOG||92.99||▼-3.3||82.04||133.53||D W|
|Occidental Petro||OXY||64.92||▼-2.6||56.83||87.67||D W|
|Anadarko Petro||APC||42.60||▼-6.3||40.40||76.70||D W|
|Pioneer Natural Res||PXD||136.79||▼-3.5||119.08||213.40||D W|
|Baker Hughes||BHGE||24.39||▼-1.9||20.09||37.76||D W|
|Ntl-Oilwell Varco||NOV||28.64||▼-6.3||24.27||49.08||D W|
|Marathon Petro||MPC||63.70||▼-4.7||54.29||88.45||D W|
|Phillips 66||PSX||91.74||▼-2.8||78.44||123.97||D W|
|Valero Energy||VLO||83.91||▼-2.3||68.81||126.98||D W|
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