Canadian oil prices move higher on Tuesday, posting a fifth consecutive month of gains

Canadian oil prices move higher on Tuesday, posting a fifth consecutive month of gains

Today's energy market action:

  • Oil prices moved higher on Tuesday, as OPEC reported another drop in production and US waivers for Iranian crude officially expire. Brent rose 1.1%, while WTI gained 0.6%. Canadian benchmarks rose in tandem with WTI, as differentials were unchanged.

  • For the month of April, both Brent and WTI, rose over 6%, a fourth consecutive month of gains.

  • Canadian benchmarks posted their fifth consecutive month of gains. Canadian Light and Edmonton Condensate (C5+) rose over 6% in April. Western Canadian Select (WCS) gained just 1.4%, as the heavy oil discount widened from less than US$10 at the end of March to about US$12.50 a barrel at the end of April.

  • Gasoline prices rose almost 2% for the day, and 10% for the month. Heating oil also rose over 1% for the day, and over 5% for the month.

Today's currency and equity market action:

  • The Canadian economy contracted 0.1%, blamed mostly on fewer exports of mined products, particularly potash and coal. Oil and gas extraction dipped another 0.6% in February, also sending energy services activity lower. 

  • Despite the bearish news, the loonie rose 0.5%, mostly due to weakness in the US dollar, which declined 0.4%. The British pound was today's big winner, gaining 0.8%.

  • Global equity markets were mixed on Tuesday, including North America. The NASDAQ retreated from yesterday's record high, falling 0.8%, while the NYSE rose 0.4%. The S&P 500 Large Cap Index gained 0.1%, while the TSX fell 0.1%. 

  • Energy was unchanged in the US, but down over 1% in Canada. The energy services group was the worst performing subsector on both sides of the border.

  • For the month of April, the TSX energy sector gained over 5%, while SPX energy was unchanged.

Today's geopolitical news:

  • Venezuelan opposition leader Juan Guaido is calling on the military to overthrow the ruling Maduro government. President Maduro remains undeterred, and says the majority of his troops remain loyal to his regime. US imports of Venezuelan crude declined to 242,000 bbl/day in February, less than half of January's volumes.

  • Saudi Energy Minister Khalid al-Falih says his country is in no hurry to boost oil output, despite the today's expiry of Iranian crude import waivers. Falih says he stands ready to meet consumer demand as required, but also hinted OPEC's existing production quotas could be extended to the end of the year. No decision is expected until the next OPEC+ meeting at the end of June.

Today's oil and gas supply update:

  • According to Reuters, OPEC output hit a 4-year low in April, falling another 90,000 bbl/day to 30.23 million bbl/day. Nigeria, Libya, Iraq and Saudi Arabia boosted output, offsetting losses out of Venezuela (down 100,000 bbl/day) and Iran (down 150,000 bbl/day).

  • The Energy Information Administration (EIA) reported a second consecutive month of declines in US oil output for February, falling by 187,000 bbl/day from the previous month. February output was estimated at an average of 11.7 million bbl/day, down from a record 12.0 million bbl/day in December. Declines were seen in the Gulf of Mexico, North Dakota and Oklahoma.

  • After dipping slightly in January, natural gas production out of the Lower 48 rose to a record 99.0 Bcf/day in February. Texas and Pennsylvania contributed to most of the gains, with each state also posting record production for the month.

Today's other notable energy news:

  • Warren Buffett's Berkshire Hathaway has made a US$10 billion investment in Occidental Petroleum, to help finance its planned US$38 billion purchase of Anadarko Petroleum. The funds come in the form of preferred stock yielding 8% dividend, and warrants for up to 80 million common shares. Occidental CEO Vicki Hollub says she is "thrilled" to have Buffett's backing.

  • EQM Midstream Partners now says its US$4.6 billion Mountain Valley Pipeline is unlikely to be completed this year, pushing start-up to sometime in 2020. The 2 Bcf/day natural gas line, which runs 300-miles from West Virginia to Virginia, has been embroiled in a number of legal and regulatory challenges. The project is jointly owned with NextEra Energy, Consolidated Edison, AltaGas and RGC Resources.

  • McDermott International announced an EPC contract by Eni for work on a wellhead platform to be installed in the Amoca field, located offshore Dos Bocas, Mexico.

Today's notable first quarter earnings results:

  • Encana reported a net loss of $245 million, including $571 million in several non-cash write-downs. Total production rose 13% to 566,600 boe/day in the first quarter. The company now says it expects to see $150 million in savings from its acquisition of Newfield Exploration, about 20% higher than the original estimate.

  • Secure Energy Services posted a first quarter profit of $1.3 million, down 79% from the same time last year. Revenues dipped 2% y/y to $177 million. The company also increased its available credit facility by $305 million to $805 million.

  • UK-major BP reported an "underlying replacement cost profit" of US$2.4 billion, down 8% y/y. Production rose 2% y/y to 3.8 million boe/day.

  • ConocoPhillips posted a net profit of US$1.8 billion, about double the same time last year. Excluding Libya, production rose 5% y/y to 1.32 million boe/day. Second quarter output is expected to decline to between 1.24 and 1.28 million boe/day due to maintenance turnarounds planned in Alaska, Canada and Europe.

  • Phillips 66 reported a US$204 million profit for the first quarter of 2019, down from US$2.2 billion in the previous quarter. The company's refining business posted a US$198 million loss, due to weaker refining margins, higher maintenance activity and unplanned outages. Refining margins declined 56% to $7.23 per barrel due to higher pricing for Canadian crude. 

  • Devon Energy posted a first quarter loss of US$317 million, due mostly to a US$670 million hedging charge. Excluding hedges, revenues rose 24% to US$1.4 billion. Production declined 3% to 529,000 boe/day, despite a 76% increase out of the Delaware basin. For 2019, the company now says it expects to boost US output 17%. The company says it plans to spin off or sell its operations in Canada and the Barnett Shale by the end of this year, with data rooms expected to open in the second quarter.

  • Baker Hughes/GE posted a first quarter profit of US$273 million, down 45% y/y. Revenues rose 4% y/y to US$5.6 billion.

  • CNX Resources posted a net loss of US$87 million, including a US$157 million non-cash hedging charge. Quarterly production rose 3% y/y to 1.478 Bcfe/day.

OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$72.80▲1.150.47
 
86.29
WTI$63.91▲0.642.53
 
76.41
CDN LT$58.86▲0.720.83
 
69.32
C5+$59.56▲0.737.04
 
71.40
WCS$51.46▲0.812.59
 
56.30

CRUDE OIL FUTURES CURVES
BRENT
WTI
█ APR 30   █ APR 23   █ APR 16   █ APR 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
Parkland Fuel (PKI +0.8%)
Shawcor (SCL +0.6%)
Pason Systems (PSI +0.2%)
Freehold Royalties (FRU +0.1%)
Parex Resources (PXT 0%)
12-MO
HIGHS
None
TSX BEARISH INDICATORS
BOTTOM
5
Ensign Energy Svcs (ESI -6%)
CES Energy (CEU -5.1%)
Crescent Point (CPG -4.8%)
Mullen Group (MTL -4%)
Precision Drilling (PD -3.8%)
12-MO
LOWS
Mullen Group (MTL -4%)
CES Energy (CEU -5.1%)
Peyto Exploration (PEY -2.7%)
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Suncor EnergySU44.18▼-0.735.53
 
55.47D   W
Imperial OilIMO38.92▼-0.233.52
 
44.91D   W
Husky EnergyHSE14.54▼-1.613.21
 
22.99D   W
MIDSTREAM
EnbridgeENB49.49▼-1.338.17
 
51.20D   W
TransCanadaTRP63.94▼-0.347.90
 
64.46D   W
Pembina PipelinePPL47.90▼-1.439.15
 
50.65D   W
Inter PipelineIPL21.82▼-1.518.60
 
25.66D   W
Keyera KEY30.96▼-1.624.05
 
38.91D   W
Gibson EnergyGEI22.09▼-0.416.40
 
23.75D   W
LARGE CAP E&P
Cdn Natural ResCNQ40.22▼-1.130.11
 
49.08D   W
Cenovus EnergyCVE13.28▼-0.88.74
 
14.84D   W
EncanaECA9.28▼-2.86.90
 
18.54D   W
TourmalineTOU20.03▼-2.115.84
 
26.19D   W
Vermilion EnergyVET34.21▼-1.126.67
 
49.67D   W
SERVICES
Pason SystemsPSI19.95▲0.217.18
 
24.57D   W
EnerflexEFX18.53▼-0.113.55
 
20.38D   W
Mullen Group MTL10.02▼-4.09.99
 
16.93D   W
ShawcorSCL19.88▲0.615.11
 
28.89D   W
Secure EnergySES8.02▼-0.66.25
 
9.44D   W
REFINING & MARKETING
Parkland FuelPKI41.29▲0.829.55
 
47.45D   W
S&P 500 ENERGY STOCKS
SPX BULLISH INDICATORS
TOP 5
Chevron (CVX +2%)
Valero Energy (VLO +1.2%)
ConocoPhillips (COP +0.8%)
Pioneer Natural Res (PXD +0.4%)
Exxon Mobil (XOM +0.4%)
12-MO
HIGHS
None
SPX BEARISH INDICATORS
BOTTOM
5
Baker Hughes (BHGE -7.5%)
Ntl-Oilwell Varco (NOV -5.8%)
TechnipFMC (FTI -2.2%)
Occidental Petro (OXY -2.1%)
Devon Energy (DVN -1.8%)
12-MO
LOWS
None
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Exxon MobilXOM80.28▲0.464.65
 
87.36D   W
ChevronCVX120.06▲2.0100.22
 
131.08D   W
MIDSTREAM
Kinder MorganKMI19.870.014.62
 
20.44D   W
Williams CoWMB28.33▲0.120.36
 
32.22D   W
ONEOKOKE67.93▼-1.050.26
 
71.99D   W
LARGE CAP E&P
ConocoPhillipsCOP63.12▲0.856.75
 
80.24D   W
EOG ResourcesEOG96.05▼-1.082.04
 
133.53D   W
Occidental PetroOXY58.88▼-2.156.83
 
87.67D   W
Anadarko PetroAPC72.85▼-0.140.40
 
76.70D   W
Pioneer Natural ResPXD166.46▲0.4119.08
 
213.40D   W
SERVICES
SchlumbergerSLB42.68▼-1.734.99
 
75.43D   W
HalliburtonHAL28.33▼-1.524.70
 
54.91D   W
Baker HughesBHGE24.02▼-7.520.09
 
37.76D   W
Ntl-Oilwell VarcoNOV26.14▼-5.824.27
 
49.08D   W
TechnipFMCFTI24.59▼-2.218.20
 
34.39D   W
REFINERS
Marathon PetroMPC60.87▼-0.254.29
 
88.45D   W
Phillips 66PSX94.27▼-1.178.44
 
123.97D   W
Valero EnergyVLO90.66▲1.268.81
 
126.98D   W
HollyFrontierHFC47.73▼-1.746.75
 
83.28D   W
NYSE ADRs
COMPANY TICKER CLOSE %CHG L 52WK H CHART
Royal Dutch ShellRDS.A63.53▲0.655.04
 
73.86D   W
TotalTOT55.67▲1.849.70
 
65.69D   W
BPBP43.73▲1.736.28
 
47.83D   W
EniE33.93▲0.429.75
 
40.15D   W
EquinorEQNR22.19▼-0.319.95
 
28.93D   W
ANALYST RATINGS

UPGRADES

  • Centennial Resource Development (CDEV): Upgraded from Underweight to Equal Weight at Barclays.

  • Noble Energy (NBL): Upgraded from Underweight to Equal Weight at Barclays.

DOWNGRADES

  • Anadarko Petroleum (APC): Downgraded from Outperform to Market Perform at Bernstein.

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 dip as US crude stockpiles move sharply higher

Oil prices dip as US crude stockpiles move sharply higher

A quiet start to the trading week as investors digest M&A news and more Q1 earnings

A quiet start to the trading week as investors digest M&A news and more Q1 earnings

0