Canadian crude discounts widen, as June contract expires

Canadian crude discounts widen, as June contract expires

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Today's energy market action:

  • A higher US dollar dragged on most commodities lower on Friday, including energy. Brent declined 0.6% while WTI fell a more modest 0.2%. For the week, both benchmarks posted a gain of about 2%, the first increase since late-April.

  • Canada's light and heavy benchmarks tumbled 3% and almost 6%, respectively, due to expiry of the June contracts, which widened the differentials to WTI. The WTI June contract expires next Tuesday, after which all benchmarks will be trading on the July contract.

  • Gasoline prices decline 0.5% for the day, but ended the week 1.5% higher than the previous Friday's close.

Today's currency and equity market action:

  • The Canadian dollar was little changed for the day, despite the repeal of US tariffs on imports of Canadian steel and aluminum. The US dollar gained another 0.2% on Friday, again due to weakness of most global currencies, particularly the British pound, which fell another 0.6%. The greenback is now up over 0.7% for the week.

  • Chinese markets were down sharply overnight, particularly the Shanghai Exchange, which sank 2.5%. US markets waffled on Friday on news of little progress in US/China trade talks.

  • In New York, the NYSE and S&P 500 both fell 0.6%. Except for utilities, all other sectors posted losses for the day. The US energy sector declined 1% of Friday, bringing the weekly loss to 0.7%.

  • The TSX declined 0.3%, dragged lower by a 1.6% decline in energy stocks. Energy was the worst performing sector of the day, with Friday's losses also wiping all gains for the week.

  • All US/Cdn energy subsectors ended the day lower, except for Canadian midstream stocks, which moved higher on Friday.

Today's notable energy news:

  • According to Baker Hughes, US drillers took another three oil rigs out of service this week, bringing the total to 802. Active oil rigs in the Permian also dropped by three, leaving 454 in service. Canada has 22 oil rigs in service this week, unchanged from the previous week.

  • After voting down the Bill C-48 crude tanker ban on Wednesday, another Canadian Senate committee passed 187 amendments to Bill C-69, sending the bill back to the Senate for another vote. The bill would see the formation of a new regulatory body for approval of large natural resources projects. If the bill is passed by the Senate, it would then go to the House of Commons for final approval, rejection or further amendments.

  • Obsidian Energy announced a deal to sell its 55% stake in the Peace River Oil Partnership for $97 million. The company says the divestiture will reduce overall operating costs and allow it to focus on its core assets in the Cardium region.

  • ExxonMobil says developing the Permian Basin will generate US$64 billion in revenues for the state of New Mexico over the next 40 years. Revenues will mostly come from new leases, royalties and taxes, and assumes a WTI price of US$40/bbl. The Permian stretches from West Texas to southeastern New Mexico, encompassing both the prolific Midland and Delaware Basins. Exxons says it plans to grow output from the region to over 1 million boe/day by 2024.

  • The government of Argentina awarded explorations permits in the Malvinas West offshore basin. Winners include state-owned YPF, ExxonMobil, Total, BP, Tullow Oil, Equinor, Eni, Qatar Petroleum and Royal Dutch Shell. The government says it raised US$724 million in the auction, which will hopefully boost the country's reserves.

  • Fallout from the tainted 1 million bbl/day Druzhba pipeline continues to unfold, with Kazakhstan now accusing Russia of contaminating their exports. French energy major Total partially suspended production at its 230,000 bbl/day Leuna refinery in Germany, while some other refineries have been forced to declare force majeure due to lack of clean feedstock. Several countries and refineries have asked to be compensated for damages or shutdowns which resulted from the contaminated crude. Druzhba operator Transneft says the contamination occurred at storage terminal, resulting in abnormally high chloride levels. Russia says it may take several more weeks to completely clear each branch of the pipeline.

OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$72.21▼0.650.47
 
86.29
WTI$62.76▼0.242.53
 
76.41
CDN LT$55.51▼3.020.83
 
69.32
C5+$57.11▼2.637.04
 
71.40
WCS$47.01▼5.812.59
 
56.30

CRUDE OIL FUTURES CURVES
BRENT
WTI
█ MAY 17   █ MAY 10   █ MAY 3   █ APR 26   (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
Keyera (KEY +1.6%)
Enbridge (ENB +1.2%)
Parkland Fuel (PKI +1.1%)
TransCanada (TRP +1%)
Birchcliff Energy (BIR +0.8%)
12-MO
HIGHS
TransCanada (TRP +1%)
TSX BEARISH INDICATORS
BOTTOM
5
Seven Generations (VII -3.9%)
Baytex Energy (BTE -3.7%)
MEG Energy (MEG -3.4%)
Enerplus (ERF -3.3%)
Nuvista Energy (NVA -3.3%)
12-MO
LOWS
Seven Generations (VII -3.9%)
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Suncor EnergySU43.33▼-1.035.53
 
55.47D   W
Imperial OilIMO37.61▼-1.133.52
 
44.91D   W
Husky EnergyHSE13.49▼-1.013.10
 
22.99D   W
MIDSTREAM
EnbridgeENB50.50▲1.239.40
 
51.20D   W
TransCanadaTRP65.50▲1.047.90
 
66.00D   W
Pembina PipelinePPL48.91▼-0.139.15
 
50.65D   W
Inter PipelineIPL21.02▲0.418.60
 
25.66D   W
Keyera KEY33.99▲1.624.05
 
38.91D   W
Gibson EnergyGEI23.17▲0.016.76
 
23.75D   W
LARGE CAP E&P
Cdn Natural ResCNQ36.67▼-2.130.11
 
49.08D   W
Cenovus EnergyCVE11.63▼-1.48.74
 
14.84D   W
EncanaECA8.96▼-1.96.90
 
18.54D   W
TourmalineTOU19.33▼-1.815.84
 
26.19D   W
Vermilion EnergyVET31.00▼-1.826.67
 
49.67D   W
SERVICES
Pason SystemsPSI19.88▲0.717.18
 
24.57D   W
EnerflexEFX17.41▼-0.113.55
 
20.38D   W
Mullen Group MTL10.14▼-0.59.39
 
16.93D   W
ShawcorSCL18.64▼-1.115.11
 
28.89D   W
Secure EnergySES7.57▼-2.36.25
 
9.44D   W
REFINING & MARKETING
Parkland FuelPKI40.73▲1.130.01
 
47.45D   W
S&P 500 ENERGY STOCKS
SPX BULLISH INDICATORS
TOP 5
Diamondback (FANG +0.4%)
ONEOK (OKE +0.1%)
12-MO
HIGHS
Kinder Morgan (KMI -1%)
SPX BEARISH INDICATORS
BOTTOM
5
Helmerich & Payne (HP -4.5%)
Ntl-Oilwell Varco (NOV -3.2%)
HollyFrontier (HFC -3.2%)
Phillips 66 (PSX -3%)
Halliburton (HAL -2.7%)
12-MO
LOWS
Occidental Petro (OXY -1.8%)
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Exxon MobilXOM75.91▼-0.664.65
 
87.36D   W
ChevronCVX120.52▼-0.2100.22
 
130.39D   W
MIDSTREAM
Kinder MorganKMI20.21▼-1.014.62
 
20.55D   W
Williams CoWMB27.50▼-0.520.36
 
32.22D   W
ONEOKOKE68.17▲0.150.26
 
71.99D   W
LARGE CAP E&P
ConocoPhillipsCOP62.10▼-0.856.75
 
80.24D   W
EOG ResourcesEOG93.02▼-2.282.04
 
133.53D   W
Occidental PetroOXY52.76▼-1.852.62
 
87.67D   W
Anadarko PetroAPC72.61▼-0.240.40
 
76.70D   W
Pioneer Natural ResPXD154.27▼-0.5119.08
 
213.40D   W
SERVICES
SchlumbergerSLB39.02▼-2.134.99
 
75.43D   W
HalliburtonHAL25.18▼-2.724.33
 
54.91D   W
Baker HughesBHGE22.91▼-0.320.09
 
37.41D   W
Ntl-Oilwell VarcoNOV23.95▼-3.223.42
 
49.08D   W
TechnipFMCFTI22.46▼-2.218.20
 
34.39D   W
REFINERS
Marathon PetroMPC51.95▼-1.750.19
 
88.45D   W
Phillips 66PSX84.81▼-3.078.44
 
123.97D   W
Valero EnergyVLO83.71▼-2.168.81
 
126.98D   W
HollyFrontierHFC42.94▼-3.242.19
 
83.28D   W
NYSE ADRs
COMPANY TICKER CLOSE %CHG L 52WK H CHART
Royal Dutch ShellRDS.A64.27▲0.055.04
 
73.86D   W
TotalTOT54.81▲1.049.70
 
65.69D   W
BPBP42.34▲0.136.28
 
47.83D   W
EniE32.91▲0.229.75
 
39.35D   W
EquinorEQNR20.93▼-1.419.95
 
28.93D   W
ANALYST RATINGS

UPGRADES

  • CNOOC (CEO): Upgraded from Neutral to Overweight at JPMorgan.

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
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