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

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

Today's energy market action:

  • Crude benchmarks all dipped just under 1% on Tuesday, reversing some of Monday's gains.

  • Differentials on Canadian crude were little changed.

  • Heating oil also broke a three-day winning streak, declining 0.6% for the day.

  • Gasoline bucked the downdraft on Tuesday, rising 0.6% to end the day at US$2 a gallon. Wholesale gasoline prices are now up over 50% since the end of 2018.

Today's treasury, currency and equity market update:

  • The International Monetary Fund cut its global growth forecast from 3.5% to 3.3% this year, the slowest expansion since 2016. The IMF's list of headwinds include trade wars and a disorderly Brexit. Global bond yields dipped slightly on the news.

  • Canada's 2019 GDP estimate was also cut from 1.9% to 1.5%, while US growth was reduced from 2.5% to 2.3%.

  • Except for the yen, which edged up 0.3% on Tuesday, most other currencies were little changed for the day.

  • Renewed concerns over US/EU trade relations prompted a pullback in equity markets on Tuesday, the first meaningful decline in five days.

  • The NYSE and Dow Jones Industrial Average fell 0.7%, while the S&P 500 slid 0.6%. Industrial and energy stocks were the biggest drags in US markets. Energy declined 1.3% on the SPX, wiping out all of Monday's gains.

  • In Toronto, the TSX fell 0.4%. The Canadian energy sector fell 0.8% for the day.

  • All subsectors ended the day lower, with US E&Ps posting the biggest declines.

Today's supply/demand updates:

  • The American Petroleum Institute is forecasting a 4.1 million barrel build in US crude stockpiles for last week. Product inventories are expected to show another week of drawdowns. Official numbers from the Energy Information Administration (EIA) are due to be released Wednesday morning.

  • In this month's Short Term Energy Outlook, the EIA adjusted this year's full-year US output forecast from 12.3 million to 12.4 million bbl/day. Next year's production is expected to average 13.1 million bbl/day, up 0.5% from its previous forecast.

  • The EIA's world oil output forecast was left roughly unchanged at an average of 101.5 million bbl/day this year, rising to 103.2 million bbl/day in 2020.

Today's revised oil price forecasts: 

  • Canaccord Genuity raised its 2019 WTI forecast by US$10 a barrel to US$60, while estimates Brent was increased by US$5 to US$65 a barrel. The financial services firm remains especially positive on Alberta crude prices, in light of the province's curtailment program.

  • The EIA also bumped up its WTI price forecast to almost US$59 this year, up 5% from its previous forecast. Expectations for Brent have also been boosted up 4% to US$65.15 a barrel.

Today's other notable energy news:

  • Alberta Premier Rachel Notley says she expects the Trudeau Liberal to re-approve the Trans Mountain Expansion Project by the end of May. The premier says she "would bet her political future" that construction will be restarted by the fall.

  • Japan’s JERA signed an agreement with Mitsubishi Corp to buy up to 1.2 million t/y of LNG, to be supplied from the LNG Canada terminal in Kitimat, BC. The 15-year agreement would begin in April 2024. JERA is a joint-venture between Tokyo Electric Power and Chubu Electric Power, and is also the world's largest buyer of LNG. Mitsubishi Corp holds a 15% stake in LNG Canada, which will be operated by Royal Dutch Shell.

  • Total and its partners Oil Search and ExxonMobil announced a deal with the government of Papua New Guinea to begin FEED on the US$13 billion Papua LNG project. The 5.4 million t/y facility will consist of two trains, processing gas from the Elk and Antelope gas fields. The companies are aiming for a final investment decision sometime in 2020, with a projected in-service date of 2024.

  • Equinor’s Aasta Hansteen gas field in the Norwegian Sea has been shut-in due to a a gas leak discovered on Monday. The field is jointly owned with ConocoPhillips, OMV and Wintershall, producing up to 23 million cubic meters per day.

  • Shell says a Dutch trade union strike will significantly impact production at its 400,000 bbl/day Pernis oil refinery, potentially reducing output to just 65% of capacity. Shell's Moerdijk petrochemical plant will also be impacted by the strike. The company is threatening to cut workers' salaries "for as long as the strike continues."

Today's EPC news:

  • KBR was awarded a pre-FEED services contract for Phases 2 and 3 of BP's Greater Tortue Ahmeyim project, located at the maritime border of Senegal and Mauritania. The two phases will significantly expand offshore production capacity, delivering the additional gas volumes to the existing Phase 1 hub. Financial terms of the deal were not disclosed.

  • TechnipFMC announced a significant contract by Total to supply subsea equipment for the Lapa field, located in the pre-salt Santos Basin offshore Brazil. The field is jointly owned with Shell, Sinopec, Repsol and Petrobras.

OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$70.61▼0.750.47
 
86.29
WTI$63.98▼0.742.53
 
76.41
CDN LT$60.45▼0.920.83
 
69.32
C5+$59.85▼0.737.04
 
71.40
WCS$55.76▼0.812.59
 
56.21

CRUDE OIL FUTURES CURVES
BRENT
WTI
█ APR 9   █ APR 2   █ MAR 26   █ MAR 19   (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
  • Nuvista Energy (NVA +2.6%)
  • Whitecap Res (WCP +1.1%)
  • Birchcliff Energy (BIR +1.1%)
  • Inter Pipeline (IPL +0.9%)
  • Crescent Point (CPG +0.8%)
  • 12-MO HIGHS
  • None
  • TSX BEARISH INDICATORS
    BOTTOM
    5
  • Encana (ECA -4.3%)
  • CES Energy (CEU -3.6%)
  • Gran Tierra (GTE -3.2%)
  • Baytex Energy (BTE -2.4%)
  • ARC Resources (ARX -2.4%)
  • 12-MO LOWS
  • None
  • COMPANY TICKER CLOSE %CHG L 52WK H CHART
    INTEGRATED
    Suncor EnergySU44.15▼-1.435.53
     
    55.47D   W
    Imperial OilIMO37.470.033.52
     
    44.91D   W
    Husky EnergyHSE13.92▼-0.513.21
     
    22.99D   W
    MIDSTREAM
    EnbridgeENB49.14▼-0.637.36
     
    49.70D   W
    TransCanadaTRP61.31▼-0.547.90
     
    61.64D   W
    Pembina PipelinePPL49.50▼-0.938.95
     
    50.45D   W
    Inter PipelineIPL22.07▲0.918.60
     
    25.66D   W
    Keyera KEY31.77▼-0.424.05
     
    38.91D   W
    Gibson EnergyGEI23.27▼-0.616.15
     
    23.75D   W
    LARGE CAP E&P
    Cdn Natural ResCNQ39.11▲0.530.11
     
    49.08D   W
    Cenovus EnergyCVE12.75▼-0.78.74
     
    14.84D   W
    EncanaECA9.26▼-4.36.90
     
    18.54D   W
    TourmalineTOU21.14▲0.715.84
     
    26.19D   W
    Vermilion EnergyVET33.89▼-0.126.67
     
    49.67D   W
    SERVICES
    Pason SystemsPSI20.16▼-1.717.18
     
    24.57D   W
    EnerflexEFX19.55▲0.313.55
     
    20.38D   W
    Mullen Group MTL12.04▼-0.511.26
     
    16.93D   W
    ShawcorSCL21.01▼-0.515.11
     
    28.89D   W
    Secure EnergySES8.47▼-1.66.25
     
    9.44D   W
    REFINING & MARKETING
    Parkland FuelPKI40.60▲0.428.47
     
    47.45D   W
    S&P 500 ENERGY STOCKS
    SPX BULLISH INDICATORS
    TOP 5
  • Cabot O&G (COG +1.2%)
  • 12-MO HIGHS
  • Cabot O&G (COG +1.2%)
  • SPX BEARISH INDICATORS
    BOTTOM
    5
  • Noble Energy (NBL -3.8%)
  • Cimarex Energy (XEC -3.6%)
  • Concho Res (CXO -3.5%)
  • Devon Energy (DVN -3%)
  • TechnipFMC (FTI -2.5%)
  • 12-MO LOWS
  • None
  • COMPANY TICKER CLOSE %CHG L 52WK H CHART
    INTEGRATED
    Exxon MobilXOM81.93▼-1.364.65
     
    87.36D   W
    ChevronCVX125.54▼-0.9100.22
     
    131.08D   W
    MIDSTREAM
    Kinder MorganKMI19.89▼-0.314.62
     
    20.44D   W
    Williams CoWMB28.71▼-1.020.36
     
    32.22D   W
    ONEOKOKE69.87▼-0.950.26
     
    71.99D   W
    LARGE CAP E&P
    ConocoPhillipsCOP65.70▼-1.256.75
     
    80.24D   W
    EOG ResourcesEOG98.57▼-0.982.04
     
    133.53D   W
    Occidental PetroOXY67.28▼-1.656.83
     
    87.67D   W
    Anadarko PetroAPC46.17▼-2.240.40
     
    76.70D   W
    Pioneer Natural ResPXD148.94▼-1.8119.08
     
    213.40D   W
    SERVICES
    SchlumbergerSLB45.58▼-1.434.99
     
    75.43D   W
    HalliburtonHAL30.81▼-1.524.70
     
    54.91D   W
    Baker HughesBHGE26.68▼-0.520.09
     
    37.76D   W
    Ntl-Oilwell VarcoNOV28.03▼-1.024.27
     
    49.08D   W
    TechnipFMCFTI24.64▼-2.518.20
     
    34.39D   W
    REFINERS
    Marathon PetroMPC62.16▼-1.954.29
     
    88.45D   W
    Phillips 66PSX97.37▼-1.078.44
     
    123.97D   W
    Valero EnergyVLO85.11▼-1.368.81
     
    126.98D   W
    HollyFrontierHFC48.17▼-2.146.75
     
    83.28D   W
    NYSE ADRs
    COMPANY TICKER CLOSE %CHG L 52WK H CHART
    Royal Dutch ShellRDS.A64.57▼-1.155.04
     
    73.86D   W
    TotalTOT56.44▼-1.149.70
     
    65.69D   W
    BPBP44.99▼-0.536.28
     
    47.83D   W
    EniE35.65▲0.429.75
     
    40.15D   W
    EquinorEQNR22.85▼-0.819.95
     
    28.93D   W
    ANALYST RATINGS

    UPGRADES

    • Bonterra Energy (BNE.TO): Upgraded from Hold to Buy at Canaccord Genuity.

    • Nuvista Energy (NVA.TO): Upgraded from Hold to Buy at Canaccord Genuity.

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

    DOWNGRADES

    • Calfrac Well Services (CFW.TO): Downgraded from Outperform to Sector Perform at National Bank.

    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
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    TSX energy breaks to the upside, returning to the highs of last November

    Geopolitical tensions give oil prices a lift on Monday

    Geopolitical tensions give oil prices a lift on Monday

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