Geopolitical tensions give oil prices a lift on Monday

Geopolitical tensions give oil prices a lift on Monday

Today's energy market action:

  • Ongoing geopolitical tensions in Libya helped lift energy commodities on Monday, including crude oil.

  • WTI rose over 2%, touching a fresh 5-month high, while Brent gained another 1%.

  • Canadian differentials were little changed for the day. WCS and Canadian Light both gained 2.4% on Monday.

  • Gasoline and heating oil also rose almost 1%.

Today's currency and equity market update:

  • The US dollar dipped 0.3%, helping the loonie rise back above 75 cents. Bond markets were little moved on Monday.

  • US markets opened the day lower, but staged a recovery before the closing bell.

  • The NYSE, S&P 500 and TSX all edged up 0.1%.

  • Energy was the best performing sector on both sides of the border, rising 0.5% on the S&P 500 and 1.5% on the TSX.

  • Producers and integrated stocks were the best performers in Canada, while the energy services subsector had the biggest gains in US markets.

Today's geopolitical news:

  • Renewed fighting in Libya is raising concerns of more supply disruptions. The Libyan National Army has now seized control of oil fields on the south side of the country, and is advancing towards the capital. The country's production was just recently restored after force majeure was lifted on its largest oilfield.

  • A senior Russian official has signalled a willingness to end his country's production pact with OPEC. Kirill Dmitriev, a key supporter of OPEC's output caps, now says an "improving market situation" could justify an increase in production by as much as 228,000 bbl/day, as early as June. Rosneft head Igor Sechin has also called for Russia to increase output, complaining of lost market share. The next meeting between OPEC and its allies is scheduled for the end of June.

Today's other notable energy news:

  • Private-equity firm Carlyle Group has purchased a 30% stake in Madrid-based Cepsa for US$3.6 billion from Abu Dhabi sovereign wealth fund Mubadala Investment Co. The deal includes the company's debt. Carlyle also retains the right to purchase another 10% stake.

  • Engineering and technology provider KBR has selected Baker Hughes (BHGE) for its on-going LNG standardization project. Under terms of the deal, the mid-size LNG modules will use BHGE's gas turbine driver technology. KBR is responsible for the design and construction about one-third of the world's LNG facilities.

  • Royal Dutch Shell signed an agreement with China's Sinopec to study unconventional oil reserves contained within the East China block. China’s shale oil reportedly has very low permeability, which translates into low well productivity, making the economics challenging.

  • Ensign Energy Services subsidiary Ensign Drilling announced an offering of US$700 million in Senior Notes due in 2024. Net proceeds will be used to replay outstanding loans under Ensign's existing senior loan facility.

Today's analyst action:

  • Analysts from Industrial Alliance Securities remain bullish on large-cap Canadian midstream names and smaller-cap E&Ps. Analyst Jeremy Rosenfield says he expects "mid-single-digit growth" in earnings and cash flow for both TransCanada and Enbridge, over the longer term. Rosenfield remains bullish on both stocks at current levels, assigning each company a "buy" rating. In the producer space, analyst Michael Charlton says "the bulls are gathering" due to falling global supply and expectations for "more friendly" provincial and federal levels of government. Charlton's top picks include Surge Energy, Tamarack Valley Energy and Yanagarra Energy, due in part to a proportion of liquids production and lower hedging.

  • The National Bank says Canada's energy sector is showing signs of structural improvement, due in part to better pricing for heavy oil, and ramp-up of crude-by-rail volumes. The bank is especially bullish on Birchcliff Energy, Cenovus Energy and MEG Energy, but remains cautious on Encana.

OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$71.10▲1.150.47
 
86.29
WTI$64.40▲2.142.53
 
76.41
CDN LT$60.98▲2.420.83
 
69.32
C5+$60.28▲2.237.04
 
71.40
WCS$56.19▲2.412.59
 
56.21

CRUDE OIL FUTURES CURVES
BRENT
WTI
█ APR 8   █ APR 1   █ MAR 25   █ MAR 18   (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
  • Crescent Point (CPG +12.2%)
  • Gran Tierra (GTE +7.6%)
  • MEG Energy (MEG +6.4%)
  • Kelt Exploration (KEL +5.8%)
  • Baytex Energy (BTE +5%)
  • 12-MO HIGHS
  • TransCanada (TRP +0.1%)
  • TSX BEARISH INDICATORS
    BOTTOM
    5
  • Mullen Group (MTL -1.2%)
  • Pembina Pipeline (PPL -0.5%)
  • Shawcor (SCL -0.3%)
  • Inter Pipeline (IPL -0.2%)
  • Enbridge (ENB -0.2%)
  • 12-MO LOWS
  • None
  • COMPANY TICKER CLOSE %CHG L 52WK H CHART
    INTEGRATED
    Suncor EnergySU44.77▲0.635.53
     
    55.47D   W
    Imperial OilIMO37.47▲2.533.52
     
    44.91D   W
    Husky EnergyHSE13.99▲2.213.21
     
    22.99D   W
    MIDSTREAM
    EnbridgeENB49.42▼-0.237.36
     
    49.70D   W
    TransCanadaTRP61.64▲0.147.90
     
    61.64D   W
    Pembina PipelinePPL49.97▼-0.538.83
     
    50.45D   W
    Inter PipelineIPL21.88▼-0.218.60
     
    25.66D   W
    Keyera KEY31.89▲0.824.05
     
    38.91D   W
    Gibson EnergyGEI23.40▲0.316.15
     
    23.75D   W
    LARGE CAP E&P
    Cdn Natural ResCNQ38.93▲1.430.11
     
    49.08D   W
    Cenovus EnergyCVE12.84▲2.18.74
     
    14.84D   W
    EncanaECA9.68▲0.96.90
     
    18.54D   W
    TourmalineTOU20.99▲1.115.84
     
    26.19D   W
    Vermilion EnergyVET33.92▲0.426.67
     
    49.67D   W
    SERVICES
    Pason SystemsPSI20.51▲1.717.18
     
    24.57D   W
    EnerflexEFX19.49▲0.413.55
     
    20.38D   W
    Mullen Group MTL12.10▼-1.211.26
     
    16.93D   W
    ShawcorSCL21.12▼-0.315.11
     
    28.89D   W
    Secure EnergySES8.61▲0.16.25
     
    9.44D   W
    REFINING & MARKETING
    Parkland FuelPKI40.450.028.07
     
    47.45D   W
    S&P 500 ENERGY STOCKS
    SPX BULLISH INDICATORS
    TOP 5
  • Schlumberger (SLB +2.6%)
  • Cabot O&G (COG +2.5%)
  • Concho Res (CXO +2%)
  • Diamondback (FANG +1.9%)
  • Halliburton (HAL +1%)
  • 12-MO HIGHS
  • None
  • SPX BEARISH INDICATORS
    BOTTOM
    5
  • HollyFrontier (HFC -1.7%)
  • Noble Energy (NBL -1%)
  • Valero Energy (VLO -0.6%)
  • Marathon Oil (MRO -0.6%)
  • Kinder Morgan (KMI -0.6%)
  • 12-MO LOWS
  • None
  • COMPANY TICKER CLOSE %CHG L 52WK H CHART
    INTEGRATED
    Exxon MobilXOM83.00▲0.664.65
     
    87.36D   W
    ChevronCVX126.68▲0.2100.22
     
    131.08D   W
    MIDSTREAM
    Kinder MorganKMI19.94▼-0.614.62
     
    20.44D   W
    Williams CoWMB29.00▼-0.420.36
     
    32.22D   W
    ONEOKOKE70.52▼0.050.26
     
    71.99D   W
    LARGE CAP E&P
    ConocoPhillipsCOP66.55▲0.756.75
     
    80.24D   W
    EOG ResourcesEOG99.48▲0.982.04
     
    133.53D   W
    Occidental PetroOXY68.37▲0.556.83
     
    87.67D   W
    Anadarko PetroAPC47.19▲0.440.40
     
    76.70D   W
    Pioneer Natural ResPXD151.73▲0.8119.08
     
    213.40D   W
    SERVICES
    SchlumbergerSLB46.17▲2.634.99
     
    75.43D   W
    HalliburtonHAL31.29▲1.024.70
     
    54.91D   W
    Baker HughesBHGE26.82▲0.220.09
     
    37.76D   W
    Ntl-Oilwell VarcoNOV28.32▲0.424.27
     
    49.08D   W
    TechnipFMCFTI25.28▲0.418.20
     
    34.39D   W
    REFINERS
    Marathon PetroMPC63.36▼-0.254.29
     
    88.45D   W
    Phillips 66PSX98.30▲0.578.44
     
    123.97D   W
    Valero EnergyVLO86.20▼-0.668.81
     
    126.98D   W
    HollyFrontierHFC49.18▼-1.746.75
     
    83.28D   W
    NYSE ADRs
    COMPANY TICKER CLOSE %CHG L 52WK H CHART
    Royal Dutch ShellRDS.A65.30▲1.255.04
     
    73.86D   W
    TotalTOT57.06▲0.649.70
     
    65.69D   W
    BPBP45.23▲1.636.28
     
    47.83D   W
    EniE35.53▼-0.529.75
     
    40.15D   W
    EquinorEQNR23.03▲1.619.95
     
    28.93D   W
    ANALYST RATINGS

    UPGRADES

    • MEG Energy (MEG.TO): Upgraded from Sector Perform to Outperform at National Bank.

      Petrobras (PBR): Upgraded from Neutral to Outperform at Credit Suisse.

    DOWNGRADES

    • None

    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
    Trade disputes and slowing global growth drag energy markets lower on Tuesday

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