Energy stocks drift lower as US dollar slowly creeps higher
Today's energy market summary:
- The Wall Street Journal reported that Libya's National Oil Company (NOC) may be poised to restore production at the 315,000 bbl/day El Sharara oil field, which has been offline since early December.
- According to Reuters, OPEC production declined 400,000 bbl/day in January, to 10.24 million bbl/day.
- Brent rose 0.8% while WTI and Edmonton Light gained 0.2%.
- The differentials on WCS and Edmonton Condensate (C5+) widened slightly, sending both benchmarks slightly lower on Friday.
- For the week, WTI, and Canadian Light posted a 5% loss, while WCS declined over 6%. Brent was the least scathed, falling just 1% from the previous Friday.
- Gasoline and Henry Hub gas prices gained over 1%, while heating oil rose 0.4%.
- AECO gas gained 3% for the day, ending the week at US$1.46/MMBtu.
Today's treasury, currency and equity market action:
- Global bond yields continue to drift lower, including the US, Germany and the UK.
- Canadian bond yields rose slightly after Statistics Canada reported a much better than expected January jobs report.
- The US dollar gained another 0.1%, ending Friday up over 1% from the previous week.
- The loonie gained 0.2%, while most other global currencies were little changed.
- Equity markets slid lower this morning, but recovered most of their losses by the end of the day.
- US markets were mostly unchanged, including the S&P 500.
- European markets, including the UK, were slightly lower overnight, while Japan's Nikkei fell 2%.
- In Toronto, the TSX declined 0.5%, including a 0.9% drop in the Canadian energy sector.
- The US energy sector also declined 0.7%.
Today's notable energy news:
- TransCanada confirmed that yesterday's leak near St. Louis, Missouri, originated from its Keystone pipeline. The state estimates about 43 barrels was spilled along the line's right-of-way. TransCanada has yet to provide a timeline for repair and restart.
- Enbridge's Platte pipeline, which was also taken offline yesterday as a precautionary measure, was restarted on Friday.
- Crew Energy boosted its 2018 year-end proved plus probable reserves to 411 million barrels of oil equivalent, mostly in the form of natural gas, up 11% from the previous year.
- South African oil major Sasol warned capital costs for its Lake Charles chemicals project in Louisiana has risen from US$11.1 to US$11.8 billion, while start-up has been delayed by up to five months. The company blamed the slippage on "several factors within and beyond" its control.
- Royal Dutch Shell has teamed up with junior UK explorer Cluff Natural Resources to develop its natural gas assets in the UK North Sea. Under terms of the agreement, Shell will acquire a 70% operating stake, while Cluff retains the remaining 30%.
Today's Q4/2018 earnings and 2019 updates:
- Fourth quarter profits at Phillips 66 rose to US$2.3 billion, up from US$548 million for the same quarter last year. The company says it benefited from wide differentials on Bakken, Canadian and other inland crude streams. Utilization rates reached 99% in Q4, as the company processed about 2.1 million barrels through its 13 refineries.
- Apache Corp cut its 2019 exploration and production budget to US$2.4 billion, significantly lower than originally planned, and much less than last year's capital spend. The company is still targeting an annualized growth rate of 6 to 10% by year-end, with full-year production guidance set at 410,000 to 440,000 boe/day. Apache says its capital spending program and dividend is "cash flow neutral" at US$53 WTI.
|CURRENCIES & YIELDS|
|Suncor Energy||SU||42.81||▼-1.3||35.53||55.47||D W|
|Imperial Oil||IMO||35.49||▼-1.4||33.43||44.91||D W|
|Husky Energy||HSE||14.95||▲0.5||13.33||22.99||D W|
|Pembina Pipeline||PPL||47.09||▼-0.6||37.60||47.84||D W|
|Inter Pipeline||IPL||20.93||▲1.1||18.60||25.66||D W|
|Gibson Energy||GEI||19.60||▼-0.9||15.68||23.32||D W|
|LARGE CAP E&P|
|Cdn Natural Res||CNQ||34.14||▼-1.0||30.11||49.08||D W|
|Cenovus Energy||CVE||9.93||▼-1.6||8.74||14.84||D W|
|Vermilion Energy||VET||31.14||▼-1.6||26.67||49.67||D W|
|Pason Systems||PSI||19.60||▲0.2||16.05||24.57||D W|
|Mullen Group||MTL||11.51||▼-2.0||11.26||16.93||D W|
|Secure Energy||SES||7.71||▲0.7||6.25||8.91||D W|
|REFINING & MARKETING|
|Parkland Fuel||PKI||37.18||▲0.4||27.36||47.45||D W|
|Exxon Mobil||XOM||73.98||▲0.2||64.65||87.36||D W|
|Kinder Morgan||KMI||18.02||▲0.3||14.62||18.67||D W|
|Williams Co||WMB||26.88||▲0.8||20.36||32.22||D W|
|LARGE CAP E&P|
|EOG Resources||EOG||92.50||▼-0.5||82.04||133.53||D W|
|Occidental Petro||OXY||64.96||▲0.1||56.83||87.67||D W|
|Anadarko Petro||APC||41.84||▼-1.8||40.40||76.70||D W|
|Pioneer Natural Res||PXD||135.71||▼-0.8||119.08||213.40||D W|
|Baker Hughes||BHGE||24.61||▲0.9||20.09||37.76||D W|
|Ntl-Oilwell Varco||NOV||28.35||▼-1.0||24.27||49.08||D W|
|Marathon Petro||MPC||62.72||▼-1.5||54.29||88.45||D W|
|Phillips 66||PSX||93.52||▲1.9||78.44||123.97||D W|
|Valero Energy||VLO||84.14||▲0.3||68.81||126.98||D W|
Cimarex Energy (XEC): Upgraded from Neutral to Positive at Susquehanna Bancshares.
Phillips 66 (PSX): Upgraded from Hold to Buy at Tudor Pickering.
UPDATED: DAILY (END-OF-DAY)
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