WTI takes a haircut as crude inventories unexpectedly rise
Today's energy and equity market action:
- A surprise build in US crude stockpiles sent WTI 1% lower on Wednesday, giving back some of yesterday's gains. Brent ended the day roughly unchanged.
- WCS declined 1.3%, while Canadian Light posted a 0.4% drop, helped by a slight narrowing of its discount to WTI.
- Most other energy commodities didn't fare much better on Wednesday. Heating oil declined 0.5% while gasoline lost almost 2%. Henry Hub fell 1.2%, returning to the lows of mid-February.
- Global equity markets were all over the map on Wednesday. Overnight, Chinese markets all ticked higher, while European markets were flat for the day.
- In New York, the NYSE dipped 0.4%, while the S&P 500 Large Cap index declined 0.5%. Except for industrials, all other sectors posted losses for the day. The US energy sector declined 0.7%.
- In Toronto, the TSX slid 0.1%, dragged lower by a 1.7% decline in energy stocks.
- Except for a handful of stocks, most energy components ended the day lower on both sides of the border.
Today's notable energy news:
- According to the Energy Information Administration, crude stockpiles unexpectedly rose by 2.8 million barrels in the US last week, mostly due to a sharp rise in Gulf Coast inventories. Gasoline and distillate stockpiles continue to trend lower, falling another 5 million barrels.
- Minnesota regulators have rejected a last-ditch effort to overturn its approval of Enbridge's Line 3 Replacement project, granting the project a final green-light on Tuesday. The $9 billion expansion is expected to be in service sometime in the second half of 2020, adding 370,000 bbl/day of crude export capacity out of Western Canada and into the US Midwest.
- Imperial Oil has resumed "a small amount" of crude exports by rail from its Edmonton terminal. The company says the volumes are "economic under current conditions." Imperial cut rail shipments from about 170,000 bbl/day in December to almost zero in February, after the heavy oil discount was cut from over US$40/bbl to about US$10. WCS prices in the Gulf Coast are now averaging about US$3 above par with the WTI benchmark, or roughly US$63 a barrel.
- Saudi Aramco has agreed to purchase the Saudi kingdom's 70% stake in Saudi Basic Industries Corp (SABIC) for US$69.1 billion. The remaining 30% will continue to be publicly traded on the Saudi stock exchange. Aramco is expected to hold its first international bond issuance in the next few weeks, in part to fund the deal.
|Suncor Energy||SU||43.48||▼-2.4||35.53||55.47||D W|
|Imperial Oil||IMO||36.00||▼-1.3||33.43||44.91||D W|
|Husky Energy||HSE||13.27||▼-1.9||13.27||22.99||D W|
|Pembina Pipeline||PPL||49.12||▲0.3||37.60||50.45||D W|
|Inter Pipeline||IPL||21.89||▼-0.5||18.60||25.66||D W|
|Gibson Energy||GEI||23.29||▼-0.1||15.90||23.63||D W|
|LARGE CAP E&P|
|Cdn Natural Res||CNQ||36.42||▼-1.9||30.11||49.08||D W|
|Cenovus Energy||CVE||11.53||▼-1.2||8.74||14.84||D W|
|Vermilion Energy||VET||33.34||▼-0.8||26.67||49.67||D W|
|Pason Systems||PSI||19.81||▲0.1||16.61||24.57||D W|
|Mullen Group||MTL||12.04||▼-0.7||11.26||16.93||D W|
|Secure Energy||SES||8.31||▼-0.4||6.25||9.44||D W|
|REFINING & MARKETING|
|Parkland Fuel||PKI||39.96||▲0.6||27.96||47.45||D W|
|Exxon Mobil||XOM||80.34||▼-0.8||64.65||87.36||D W|
|Kinder Morgan||KMI||19.98||▼-0.6||14.62||20.44||D W|
|Williams Co||WMB||28.49||▼-0.4||20.36||32.22||D W|
|LARGE CAP E&P|
|EOG Resources||EOG||94.59||▼-0.2||82.04||133.53||D W|
|Occidental Petro||OXY||66.35||▼-1.1||56.83||87.67||D W|
|Anadarko Petro||APC||44.50||▼-1.0||40.40||76.70||D W|
|Pioneer Natural Res||PXD||147.15||▲2.9||119.08||213.40||D W|
|Baker Hughes||BHGE||27.28||▼-1.5||20.09||37.76||D W|
|Ntl-Oilwell Varco||NOV||26.31||▼-1.8||24.27||49.08||D W|
|Marathon Petro||MPC||62.19||▲0.4||54.29||88.45||D W|
|Phillips 66||PSX||97.27||▼-0.8||78.44||123.97||D W|
|Valero Energy||VLO||86.02||▼-1.1||68.81||126.98||D W|
Oil States International (OIS): Upgraded from Outperform to Strong Buy at Raymond James.
UPDATED: DAILY (END-OF-DAY)
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