Oil prices rebound despite another stock market sell-off

Oil prices rebound despite another stock market sell-off

DATA SUBSCRIPTION
Sign-up for our data subscription service and get access to our complete database.

Today's energy market action:

  • After posting steep declines last week, oil prices rebounded slightly on Tuesday, despite market jitters and news of pipeline outages around the Cushing storage hub in Oklahoma.

  • Brent rose 2%, ending the day just above US$70. Backwardation on the futures curve also steepened considerably on Tuesday, indicating short-term supply disruptions.

  • WTI rose almost 1%, taking Canadian Light and Edmonton Condensate prices higher for the day. Gasoline and heating oil also rose just over 1%.

  • In contrast, WCS lost 1% as its discount to WTI widened by almost US$1 to over US$17 a barrel.

  • According to Genscape, flooding in the Midwest may have forced the shutdown of the 360,000 bbl/day Ozark pipeline, operated by MPLX, a subsidiary of Marathon Petroleum. Heavy rains in Arkansas and Oklahoma has also curtailed flows through the Iron Horse and Pony Express Pipelines, both operated by Tallgrass Energy.

  • Output from Russia declined from 11.23 million bbl/day in April to 11.13 million bbl/day in May, mostly due to lower exports via the Druzhba pipeline. The drop brings the country's output below its quota of 11.18 million bbl/day, as per Russia's agreement with OPEC+ late last year.

Today's currency, treasury and equity market action:

  • Diesel demand in China slumped almost 20% in April, one of the worst showings since the financial crisis. Demand has been falling since late 2017, blamed mostly on trade wars with the US, and refuelling concerns of a global economic slowdown.

  • Recession concerns triggered another sell-off in bond yields and equities on Tuesday. The short-term yield curve (3-month vs 10-year) moved deeper into negative territory, sending the Dow Jones Industrial Average plunging almost 240 points. Aside from the yen, most global currencies posted losses for the day, as the US dollar rallied 0.4%. The loonie declined 0.4%, ending the day at 74.14 cents.

  • The NYSE and S&P 500 both dropped almost 1% for the day. Except for communications, all sectors posted losses for the day, including energy, which declined 1.1%.

  • The TSX dipped a more modest 0.3%, helped by a good performance in gold stocks. Energy declined 1.1%, on par with losses in the US. Canadian midstream titans Enbridge and TC Energy continue to defy gravity, thanks to falling interest rates. ENB touched a new 1½-year high on Tuesday, while TRP continues to break all-time highs.

Today's other notable energy news:

  • TC Energy struck a deal to sell an 85% stake in the Northern Courier Pipeline to Alberta Investment Management Corporation (AIMCo) for $1.15 billion. The 90 km pipeline transports bitumen and diluent to and from the Fort Hills Mine and Suncor Energy's East Tank Farm, just north of Fort McMurray, AB. TC Energy will continue to operate the line. 

  • Speaking at the company's Investor Day event in Toronto, Husky Energy CEO Rob Peabody announced plans to cut capital spending by 10% over the next 5 years, now projected at $3.15 billion annually. Full year production guidance was left unchanged at about 300,000 boe/day. The company is working towards adding another 100,000 boe/day by 2023, and says it has seen much interest in its Prince George Refinery and retail fuels business. Assuming US$60 WTI, Husky says it should generate $8.7 billion in free cash flow annually, excluding dividends.

  • An Ontario court has approved Bellatrix Exploration's planned debt restructuring, reducing existing shareholders to a 16.5% equity stake. The remaining 83.5% of the company is now in the hands of its creditors. Bellatrix says its Recapitalization Transaction should be completed by the end of this week. BXE stock plunged another 13%, ending the day at $0.17 per share.

  • AltaGas formally announced the grand opening of its Ridley Island Propane Export Terminal (RIPET), located in Prince Rupert, BC. The facility began processing propane feedstock in mid-April, and made it first shipment to Asia on May 23. RIPET is expected to ship approximately 1.2 million tonnes of propane annually.

  • The government of Algeria has expressed displeasure with Total's planned takeover of Anadarko Petroleum's assets in the country. The government says they have a good relationship in place with Anadarko, and reserves the right to block the deal. Anadarko produces about 260,000 bbl/day in Algeria, representing more than 25% of the country’s total output. Earlier this month, Occidental Petroleum struck an US$8.8 billion deal to sell Anadarko's properties in Algeria, Ghana, Mozambique and South Africa to Total, contingent on its takeover of Anadarko.

  • In addition to the African assets, Occidental is also expected to divest Anadarko's midstream and offshore assets in the Gulf of Mexico. OXY's debt has swelled to US$40 billion, sending the stock to 10-year lows and putting the company at risk of a debt downgrade.

  • Brazil's Supreme Court has blocked Petrobras from selling its eight refineries, the TAG natural gas pipeline network and fertilizer plant, siding with the company's union. Petrobras had already reached a deal to sell TAG to Italy's Engie for US$8.6 billion last April. Its eight refineries were expected to raise another US$15 billion, to be put towards debt reduction. Reuters is also reporting the company is nearing a deal to sell two oilfields off the coast of Rio de Janeiro for about US$1 billion.

  • Fitch Ratings downgraded Columbia's state-owned Ecopetrol from stable to negative, but left the company's credit rating at BBB. The move is in response to a downgrade in the Columbia's sovereign rating, from stable to negative to stable, citing weakening fiscal policy and external imbalances.

OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$70.11▲2.150.47
 
86.29
WTI$59.14▲0.942.53
 
76.41
CDN LT$51.04▲1.020.83
 
69.32
C5+$53.19▲1.037.04
 
71.40
WCS$41.84▼1.012.59
 
56.30

CRUDE OIL FUTURES CURVES
BRENT
WTI
█ MAY 28   █ MAY 21   █ MAY 14   █ MAY 7   (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
Parkland Fuel (PKI +3.1%)
Inter Pipeline (IPL +2.2%)
Nuvista Energy (NVA +1.6%)
TransCanada (TRP +1.5%)
CES Energy (CEU +1.3%)
12-MO
HIGHS
Enbridge (ENB +1%)
TransCanada (TRP +1.5%)
TSX BEARISH INDICATORS
BOTTOM
5
Enerflex (EFX -6.3%)
MEG Energy (MEG -5.8%)
Birchcliff Energy (BIR -3.5%)
Gran Tierra (GTE -2.9%)
Baytex Energy (BTE -2.6%)
12-MO
LOWS
None
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Suncor EnergySU42.25▼-1.335.53
 
55.47D   W
Imperial OilIMO36.78▼-0.933.52
 
44.91D   W
Husky EnergyHSE12.56▼-0.412.31
 
22.99D   W
MIDSTREAM
EnbridgeENB51.20▲1.039.40
 
51.22D   W
TransCanadaTRP66.66▲1.547.90
 
66.93D   W
Pembina PipelinePPL48.83▲0.239.15
 
50.65D   W
Inter PipelineIPL20.83▲2.218.60
 
25.66D   W
Keyera KEY33.60▲0.324.05
 
38.91D   W
Gibson EnergyGEI22.41▼-1.516.76
 
23.75D   W
LARGE CAP E&P
Cdn Natural ResCNQ35.45▼-1.330.11
 
49.08D   W
Cenovus EnergyCVE11.20▼-0.38.74
 
14.84D   W
EncanaECA7.92▼-0.96.90
 
18.54D   W
TourmalineTOU17.67▼-1.115.84
 
26.11D   W
Vermilion EnergyVET29.79▼0.026.67
 
49.67D   W
SERVICES
Pason SystemsPSI19.54▲1.017.18
 
24.57D   W
EnerflexEFX16.40▼-6.313.55
 
20.38D   W
Mullen Group MTL10.08▼-0.29.39
 
16.93D   W
ShawcorSCL17.60▼-1.415.11
 
28.89D   W
Secure EnergySES7.15▲0.36.25
 
9.44D   W
REFINING & MARKETING
Parkland FuelPKI41.26▲3.130.01
 
47.45D   W
S&P 500 ENERGY STOCKS
SPX BULLISH INDICATORS
TOP 5
Pioneer Natural Res (PXD +0.6%)
ConocoPhillips (COP +0.3%)
Halliburton (HAL +0.1%)
TechnipFMC (FTI 0%)
Cabot O&G (COG 0%)
12-MO
HIGHS
None
SPX BEARISH INDICATORS
BOTTOM
5
Marathon Petro (MPC -2.6%)
Helmerich & Payne (HP -2.4%)
Williams Co (WMB -2.3%)
Occidental Petro (OXY -2.2%)
Ntl-Oilwell Varco (NOV -2.2%)
12-MO
LOWS
Halliburton (HAL +0.1%)
Marathon Petro (MPC -2.6%)
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Exxon MobilXOM72.61▼-2.064.65
 
87.36D   W
ChevronCVX118.31▼-0.3100.22
 
128.55D   W
MIDSTREAM
Kinder MorganKMI19.88▼-0.914.62
 
20.57D   W
Williams CoWMB26.38▼-2.320.36
 
32.22D   W
ONEOKOKE64.26▼-2.150.26
 
71.99D   W
LARGE CAP E&P
ConocoPhillipsCOP60.05▲0.356.75
 
80.24D   W
EOG ResourcesEOG87.11▼-0.182.04
 
133.53D   W
Occidental PetroOXY52.28▼-2.251.29
 
87.67D   W
Anadarko PetroAPC71.49▼-0.740.40
 
76.70D   W
Pioneer Natural ResPXD147.90▲0.6119.08
 
198.61D   W
SERVICES
SchlumbergerSLB36.50▼-1.434.99
 
70.47D   W
HalliburtonHAL22.99▲0.122.70
 
51.14D   W
Baker HughesBHGE22.17▼-0.220.09
 
36.42D   W
Ntl-Oilwell VarcoNOV21.90▼-2.221.67
 
49.08D   W
TechnipFMCFTI22.010.018.20
 
33.60D   W
REFINERS
Marathon PetroMPC49.00▼-2.648.95
 
88.45D   W
Phillips 66PSX82.52▼-0.578.44
 
123.97D   W
Valero EnergyVLO75.09▼-1.568.81
 
126.98D   W
HollyFrontierHFC40.89▼-0.540.74
 
83.28D   W
NYSE ADRs
COMPANY TICKER CLOSE %CHG L 52WK H CHART
Royal Dutch ShellRDS.A62.56▼-1.255.04
 
71.85D   W
TotalTOT52.90▼-1.049.70
 
65.69D   W
BPBP41.48▼-0.736.28
 
47.57D   W
EniE31.00▼-1.729.75
 
39.16D   W
EquinorEQNR19.48▼-2.419.48
 
28.93D   W
ANALYST RATINGS

UPGRADES

  • EOG Resources (EOG): Upgraded from Neutral to Buy at Goldman Sachs.

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
Canadian crude benchmarks get a lift as differentials narrow

Canadian crude benchmarks get a lift as differentials narrow

Canadian benchmarks recover slightly on Friday, but post a sixth consecutive week of declines

Canadian benchmarks recover slightly on Friday, but post a sixth consecutive week of declines