Canadian benchmarks recover slightly on Friday, but post a sixth consecutive week of declines
Today's energy market action:
After yesterday's sharp sell-off, oil prices recovered slightly on Friday, helped by a weaker US dollar and third week of declines in US oil rig counts.
Crude oil benchmarks all moved higher by about 1.5% on Friday, but posted one of the steepest weekly drop so far this year. Versus last Friday's close, Brent decline 5%, WTI fell about 7%, Canadian Light declined 9% while WCS tumbled over 10%. This is the sixth consecutive week of losses for Canadian benchmarks.
Gasoline and heating oil also recouped some of Thursday's losses on Friday, but ended the week down over 5% from last Friday's close.
According to Baker Hughes, the US lost five oil rigs this week, leaving 797 rigs in service. There were 1,059 US oil rigs in service for the same time last year. Canada gained 16 rigs, bringing the total to 38.
Today's currency and equity market action:
The US dollar dipped 0.3% on Friday, giving most other foreign currencies a boost, including the loonie, which rose 0.3% for the day.
UK Prime Minister Theresa May announced her resignation effective June 7, after which her party will elect a new leader. Despite the news, the pound rose 0.4% on Friday, recovering all losses from earlier in the week.
Equity markets in New York and Toronto mostly moved higher. The NYSE gained 0.5%, while the NASDAQ and rose 0.1%. The S&P 500 also rose 0.1% for the day, but posted its third consecutive weekly loss, falling over 1% w/w. Toronto rose 0.4% for the day, but also ended the week 1% lower.
The US energy sector rose 0.2% on Friday, while Canadian energy stocks gained 0.4%. For the week, the SPX energy sector declined 3.4%, while TSX energy stocks posted a 5.5% loss.
Today's geopolitical news:
The US government deployed 1,500 troops to the Middle East, after it concluded Iran's Revolutionary Guards were responsible for attacking crude and product tankers in the Strait of Hormuz earlier this month. There are about 70,000 American troops already stationed across the region.
German shipper BSM has legally detained three PDVSA oil tankers, in hopes of collecting on payments owed. BSM operates 13 out the 32 tankers owned by the Venezuelan oil firm. Another American shipping firm terminated its contract due to US sanctions. Venezuela's exports have averaged 800,000 bbl/day so far this month, down from 1.4 million bbl/day before US sanctions were imposed.
Today's other notable energy news:
BC's Court of Appeal unanimously ruled that the province cannot restrict the flow of bitumen through an interprovincial pipeline which already has federal approvals in place. The judges called the lawsuit a deliberate attempt to stop the Trans Mountain Expansion Project. The province is expected to file an appeal with the Supreme Court of Canada.
According to Gibson Energy CEO Steve Spaulding, crude-by-rail loadings out of its Hardisty terminal will rise from the current 60 trains per month to 90 trains by the end of the summer, translating to roughly 200,000 bbl/day. The CEO says the shipments mark a new record for the company. The Hardisty rail loading terminal is serviced by CP Rail and owned by USD Partners.
Tallgrass Energy temporarily shutdown the southern end of its 320,000 bbl/day Pony Express pipeline due to flooding in Oklahoma. The affected segment runs between Sterling, Colorado to Cushing, Oklahoma. The company says the line will be restarted as soon as weather permits.
According to Reuters, Total is looking to offload about one-third of its stake in the massive Kashagan oil field, located offshore Kazakhstan in the Caspian Sea. Kashagan is one of the world’s largest oilfields, producing about 400,000 bbl/day. Total's 16.8% stake is estimated to be worth about US$9 billion. Kashagan is jointly owned with Eni, Shell, ExxonMobil, KazMunayGas, Japan's Inpex and China's CNPC.
Toronto-based Brookfield Business Partners (BBU) launched a hostile bid to buyout remaining shares of Teekay Offshore Partners, for just US$1.05 a share. The move has been blasted as being "unjustifiably low" by some of Teekay's other investors, who say the company is worth at least US$4 a share. BBU is a subsidiary of Brookfield Asset Management, and presently owns 73% of Teekay Offshore.
|Suncor Energy||SU||41.81||▲1.1||35.53||55.47||D W|
|Imperial Oil||IMO||36.75||▲0.7||33.52||44.91||D W|
|Husky Energy||HSE||12.57||▲0.2||12.31||22.99||D W|
|Pembina Pipeline||PPL||48.29||▲0.7||39.15||50.65||D W|
|Inter Pipeline||IPL||20.34||▼-0.5||18.60||25.66||D W|
|Gibson Energy||GEI||22.23||▼-0.6||16.76||23.75||D W|
|LARGE CAP E&P|
|Cdn Natural Res||CNQ||34.99||▲0.5||30.11||49.08||D W|
|Cenovus Energy||CVE||11.08||▼-0.2||8.74||14.84||D W|
|Vermilion Energy||VET||29.19||▲1.1||26.67||49.67||D W|
|Pason Systems||PSI||19.04||▼-0.5||17.18||24.57||D W|
|Mullen Group||MTL||10.05||▼-0.6||9.39||16.93||D W|
|Secure Energy||SES||7.15||▼-0.1||6.25||9.44||D W|
|REFINING & MARKETING|
|Parkland Fuel||PKI||40.00||▲0.6||30.01||47.45||D W|
|Exxon Mobil||XOM||74.10||▲0.4||64.65||87.36||D W|
|Kinder Morgan||KMI||20.06||▲0.5||14.62||20.57||D W|
|Williams Co||WMB||26.99||▼-0.1||20.36||32.22||D W|
|LARGE CAP E&P|
|EOG Resources||EOG||87.16||▼-1.9||82.04||133.53||D W|
|Occidental Petro||OXY||53.47||▲1.1||51.29||87.67||D W|
|Anadarko Petro||APC||71.99||▼-0.4||40.40||76.70||D W|
|Pioneer Natural Res||PXD||147.00||▲1.0||119.08||198.61||D W|
|Baker Hughes||BHGE||22.21||▼-3.7||20.09||36.42||D W|
|Ntl-Oilwell Varco||NOV||22.39||▲1.3||21.67||49.08||D W|
|Marathon Petro||MPC||50.29||▲0.3||49.71||88.45||D W|
|Phillips 66||PSX||82.94||▲0.8||78.44||123.97||D W|
|Valero Energy||VLO||76.22||▲1.1||68.81||126.98||D W|
PetroChina (PTR): Upgraded from Neutral to Buy at Citigroup.
UPDATED: DAILY (END-OF-DAY)
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