Slowing global growth and rising US crude inventories send energy markets lower

Slowing global growth and rising US crude inventories send energy markets lower

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Today’s energy market action:

  • A rather gloomy economic forecast from the OECD and rising crude stockpiles in the US dragged equity markets and energy commodities lower on Wednesday.

  • Brent declined 1.6%, ending the day a hair under US$71 a barrel. WTI slipped 2.5%, pulling Western Canadian Select (WCS) lower by about 3%. 

  • Canadian Light declined over 4% as its discount to WTI widened by US$0.85 to over $8 a barrel, the highest since mid-December. The discount for Edmonton Condensate (C5+) also widened by US$0.75 to US$6.40. The Canadian heavy oil discount held steady at US$15.75.

  • Gasoline and heating oil both declined 1.5%, while Henry Hub natural gas prices fell 2.7%.

Today's notable economic data:

  • The OECD warned global economic growth will slow to 3.2% this year, down from over 3.5% in 2018, blamed squarely on a major slowdown in global trade. The OECD says trade wars between the US, China and the EU has stifled investment and weakened the global manufacturing sector. The agency also warned of spiralling debt-levels and slowing growth out of China, which is expected to take a heavy toll on global growth in the coming years.

  • In its latest release of meeting minutes, the US Federal Reserve showed little interest in raising rates anytime in the near future. US bond yield mostly dipped lower for the day, while the US dollar was roughly unchanged.

  • According to Statistics Canada, retail sales rose 1.1% m/m to $51.3 billion in March, due in part to a 6% jump in gasoline sales. The Canadian dollar dipped 0.2%, ending the day below 74.50 cents.

Today's equity market action:

  • North American equity markets all ended the day lower. The Dow Jones Industrial Average fell 100 points (-0.4%) while the S&P 500 dipped 0.3%. In Toronto, the TSX declined 0.6%.

  • Markets were in defensive mode on Wednesday, with staples and utilities stocks leading to the upside. Energy was the worst performing sector on both sides of the border, falling 1.6% in the US and 2.7% in Canada.

Today's notable energy news:

  • Crude stockpiles in the US unexpectedly rose 4.7 million barrels last week, with most of the gains seen in the Gulf Coast and Midwest, including a 1.3 million barrel increase at the Cushing storage terminal. Refinery utilization fell below 90%, mostly due to a big drop in the Midwest region.

  • Sempra Energy struck a 20-year deal with Saudi Aramco to supply 5 million t/y of LNG from its Port Arthur export terminal, currently under development in Texas. Aramco may also take a 25% stake in the project. Phase 1 of the terminal has two trains with a total liquefaction capacity of 11 million t/y, with plans to expand to 45 million t/y.

  • Sempra also made a request to extend the start date for its US$10 billion Cameron LNG facility in Louisiana. Federal regulators approved the project in June 2014, contingent on a 2019 start-up. Although the first train has already been put into service, the remaining two trains will be delayed to next year.

  • South Africa's Sasol warned its Lake Charles plastics plant will cost US$1 billion more than previous estimates, now forecasted at just under US$13 billion. The facility converts natural gas into ethylene, used for plastics production. The plant had an initial price tag of US$8.9 billion in 2014.

  • A 3.4 magnitude quake in the northern Dutch province of Groningen has renewed calls to shutdown production from an offshore gas field. Output from the Groningen gas field has already been significantly curtailed due to seismic activity, which resulted in major property damage. The Dutch government has already called for output to be cut in half by 2022, and will consider ending operations by 2030, if alternative sources of gas can be found. The field is operated by NAM, a joint venture between ExxonMobil and Royal Dutch Shell.

  • Suncor Energy announced plans to issue $750 million in unsecured notes, dated 2029 and yielding 3.1%. The company says net proceeds will be use to refinance or repay existing debt.

  • Secure Energy Services was approved to buyback up to 8 million shares over the next 12 months, representing 5% of current public float. This is in addition to its current buyback program for 8.2 million shares, which expires at the end of May.

OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$70.99▼1.650.47
 
86.29
WTI$61.42▼2.542.53
 
76.41
CDN LT$53.32▼4.320.83
 
69.32
C5+$55.02▼4.037.04
 
71.40
WCS$45.67▼3.312.59
 
56.30

CRUDE OIL FUTURES CURVES
BRENT
WTI
█ MAY 22   █ MAY 15   █ MAY 8   █ MAY 1   (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
Enerflex (EFX +0.4%)
Keyera (KEY +0.3%)
Gibson Energy (GEI +0.3%)
Parkland Fuel (PKI +0.2%)
12-MO
HIGHS
None
TSX BEARISH INDICATORS
BOTTOM
5
Peyto Exploration (PEY -7.9%)
TORC O&G (TOG -6.1%)
Baytex Energy (BTE -5.8%)
Crescent Point (CPG -5.4%)
Enerplus (ERF -5.4%)
12-MO
LOWS
Husky Energy (HSE -3.7%)
Nuvista Energy (NVA -4.8%)
Peyto Exploration (PEY -7.9%)
Seven Generations (VII -3.5%)
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Suncor EnergySU42.88▼-2.635.53
 
55.47D   W
Imperial OilIMO37.56▼-0.833.52
 
44.91D   W
Husky EnergyHSE12.90▼-3.712.85
 
22.99D   W
MIDSTREAM
EnbridgeENB49.99▼-0.839.40
 
51.20D   W
TransCanadaTRP65.67▼-0.547.90
 
66.00D   W
Pembina PipelinePPL48.85▼-0.139.15
 
50.65D   W
Inter PipelineIPL20.75▼-0.318.60
 
25.66D   W
Keyera KEY33.62▲0.324.05
 
38.91D   W
Gibson EnergyGEI23.25▲0.316.76
 
23.75D   W
LARGE CAP E&P
Cdn Natural ResCNQ36.02▼-1.830.11
 
49.08D   W
Cenovus EnergyCVE11.48▼-2.28.74
 
14.84D   W
EncanaECA8.71▼-4.86.90
 
18.54D   W
TourmalineTOU18.86▼-2.415.84
 
26.19D   W
Vermilion EnergyVET29.97▼-2.726.67
 
49.67D   W
SERVICES
Pason SystemsPSI19.65▼-1.417.18
 
24.57D   W
EnerflexEFX18.13▲0.413.55
 
20.38D   W
Mullen Group MTL10.16▼-0.29.39
 
16.93D   W
ShawcorSCL18.49▼-0.315.11
 
28.89D   W
Secure EnergySES7.28▼-4.16.25
 
9.44D   W
REFINING & MARKETING
Parkland FuelPKI40.95▲0.230.01
 
47.45D   W
S&P 500 ENERGY STOCKS
SPX BULLISH INDICATORS
TOP 5
None
12-MO
HIGHS
None
SPX BEARISH INDICATORS
BOTTOM
5
Devon Energy (DVN -5.8%)
Concho Res (CXO -5%)
Apache (APA -4.4%)
Diamondback (FANG -4.3%)
Ntl-Oilwell Varco (NOV -4%)
12-MO
LOWS
Occidental Petro (OXY -1.4%)
Ntl-Oilwell Varco (NOV -4%)
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Exxon MobilXOM75.56▼-0.964.65
 
87.36D   W
ChevronCVX120.57▼-0.6100.22
 
130.39D   W
MIDSTREAM
Kinder MorganKMI20.340.014.62
 
20.57D   W
Williams CoWMB27.63▼-0.920.36
 
32.22D   W
ONEOKOKE66.91▼-1.650.26
 
71.99D   W
LARGE CAP E&P
ConocoPhillipsCOP63.05▼-0.956.75
 
80.24D   W
EOG ResourcesEOG92.91▼-2.882.04
 
133.53D   W
Occidental PetroOXY52.78▼-1.452.47
 
87.67D   W
Anadarko PetroAPC72.31▼-0.640.40
 
76.70D   W
Pioneer Natural ResPXD153.15▼-3.0119.08
 
210.46D   W
SERVICES
SchlumbergerSLB38.34▼-2.934.99
 
75.25D   W
HalliburtonHAL24.74▼-3.324.33
 
54.71D   W
Baker HughesBHGE23.36▼-1.120.09
 
37.07D   W
Ntl-Oilwell VarcoNOV23.13▼-4.022.63
 
49.08D   W
TechnipFMCFTI22.98▼-2.318.20
 
34.17D   W
REFINERS
Marathon PetroMPC51.92▼-2.550.19
 
88.45D   W
Phillips 66PSX85.60▼-0.778.44
 
123.97D   W
Valero EnergyVLO80.35▼-2.668.81
 
126.98D   W
HollyFrontierHFC42.70▼-3.242.19
 
83.28D   W
NYSE ADRs
COMPANY TICKER CLOSE %CHG L 52WK H CHART
Royal Dutch ShellRDS.A63.72▼-1.255.04
 
73.79D   W
TotalTOT54.13▼-1.749.70
 
65.69D   W
BPBP42.34▼-1.036.28
 
47.71D   W
EniE31.88▼-1.329.75
 
39.16D   W
EquinorEQNR20.73▼-1.319.95
 
28.93D   W
ANALYST RATINGS

UPGRADES

  • Diamond Offshore Drilling (DO): Upgraded from Underweight to Neutral at Piper Jaffray.

DOWNGRADES

  • Anadarko Petroleum (APC): Downgraded from Outperform to Market Perform at Cowen & Co.

  • Sasol (SSL): Downgraded from Buy to Hold at HSBC.

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
Energy markets take a sharp tumble as US/China trade relations deteriorate

Energy markets take a sharp tumble as US/China trade relations deteriorate

Oil prices little changed on Tuesday, despite decent rally in equity markets

Oil prices little changed on Tuesday, despite decent rally in equity markets