Canadian crude benchmarks get a lift as differentials narrow

Canadian crude benchmarks get a lift as differentials narrow

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Today's energy market action:

  • Global oil prices reversed some of yesterday's gains, as trade war tensions continue to trickle through global markets.

  • Brent declined 0.9% while WTI fell 0.6%. Heating oil and gasoline prices also gave back about 1%.

  • Canadian Light and WCS rose 0.5% and 1.1%, respectively, as their discounts to WTI narrowed.

  • The American Petroleum Institute is forecasting a 5.3 million barrel decline in US crude stockpiles for last week, while gasoline stockpiles are expected to have risen by almost 3 million barrels. Official numbers from the Energy Information Administration are due to be released Thursday morning.

Today's currency and equity market action:

  • The Bank of Canada kept interest rates unchanged at 1.75%, and warned the economy likely slowed in the first quarter, but will improve in Q2 due to a recovery in the oil sector, stability in the housing market and strong labour growth. The loonie declined another 0.2% on Wednesday, ending the day below 74 cents for the first time since January.

  • The US dollar gained another 0.2% for the day, ending Wednesday at a two-year high.

  • US markets posted a second consecutive day of losses, including a 0.6% drop in the NYSE and 0.7% decline in the S&P 500. All SPX sectors ended the day in negative territory, including a 0.6% decline in energy stocks.

  • Toronto's TSX fell 1%, with most sectors also posting losses for the day. Energy stocks bucked the downtrend, rising 1.2% thanks to decent gains posted by larger-cap Canadian producers.

Today's notable energy news:

  • Canadian Natural Resources (CNRL) struck a deal to purchase Devon Energy's Canadian assets for $3.775 billion, adding another 125,000 bbl/day of mostly heavy oil to its production portfolio. The deal will be fully financed by a $3.25 billion loan and is expected to close by the end of June.

  • Devon Energy says the divestiture of its Canadian assets allows it to reduce debt and focus on its core oil holdings in the US. The company is also looking to sell its Barnett Shale gas assets in North Texas, and says it expects to announce a buyer before the end of the year. 

  • Junior producer Connacher Oil and Gas posted a surprise first quarter profit of $3.3 million, due to higher oil prices and a forfeited deposit from a failed buyout offer. Production volumes out of Great Divide property declined 15% to 10,754 bbl/day due to voluntary cutbacks late last year. The company says it is working towards restoring output, while it continues to sit under creditor protection.

  • Tourmaline Oil Corp announced plans to trim its five-year capital spending plans by $430 million, but maintained its production targets and cash flow. The company says growth capital will be focused primarily in BC's Montney region.

  • Speaking at the company's annual meeting in Dallas today, ExxonMobil CEO Darren Woods says his company is on track to produce 5 million boe/day and double cash from operations by 2025, assuming US$60 WTI. Most of the new output is expected to come from the Permian region, Guyana and offshore Brazil.

  • Altus Midstream has exercised its option to purchase 27% stake in the Permian Highway Pipeline for about US$161 million. The US$2.1 billion pipeline will transport 2.1 Bcf/day of natural gas from the Waha area to Katy, Texas, and is said to be be fully subscribed. The line is expected to be put into service in October 2020, and is jointly owned by Kinder Morgan and EagleClaw Midstream Ventures

  • About 200 Norwegian offshore oil and gas workers have threatened strike action on June 4, as negotiations continue with their respective employers, including Equinor, BP and ConocoPhillips. The strike would affect 7 offshore fields, potentially taking over 100,000 boe/day offline.

  • Ratings agency Fitch upgraded Kinder Morgan's debt rating from "BBB-" to "BBB", and revised its outlook from Positive to Stable. Fitch says the midstream firm has economy of scale, stable cash flow and an improved balance sheet.

OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$69.45▼0.950.47
 
86.29
WTI$58.81▼0.642.53
 
76.41
CDN LT$51.31▲0.520.83
 
69.32
C5+$52.86▼0.637.04
 
71.40
WCS$42.31▲1.112.59
 
56.30

CRUDE OIL FUTURES CURVES
BRENT
WTI
█ MAY 29   █ MAY 22   █ MAY 15   █ MAY 8   (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
Cdn Natural Res (CNQ +3.8%)
Husky Energy (HSE +2.4%)
Birchcliff Energy (BIR +2.1%)
Peyto Exploration (PEY +2%)
Crescent Point (CPG +1.9%)
12-MO
HIGHS
None
TSX BEARISH INDICATORS
BOTTOM
5
Precision Drilling (PD -3.2%)
Keyera (KEY -2.8%)
Secure Energy (SES -2.7%)
Pason Systems (PSI -2.5%)
Enbridge (ENB -2.1%)
12-MO
LOWS
MEG Energy (MEG +1.4%)
Peyto Exploration (PEY +2%)
Seven Generations (VII -0.4%)
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Suncor EnergySU42.28▲0.135.53
 
55.47D   W
Imperial OilIMO36.90▲0.333.52
 
44.91D   W
Husky EnergyHSE12.86▲2.412.31
 
22.99D   W
MIDSTREAM
EnbridgeENB50.15▼-2.139.40
 
51.22D   W
TC EnergyTRP65.60▼-1.647.90
 
66.93D   W
Pembina PipelinePPL48.15▼-1.439.15
 
50.65D   W
Inter PipelineIPL21.02▲0.918.60
 
25.66D   W
Keyera KEY32.67▼-2.824.05
 
38.91D   W
Gibson EnergyGEI22.26▼-0.716.76
 
23.75D   W
LARGE CAP E&P
Cdn Natural ResCNQ36.81▲3.830.11
 
49.08D   W
Cenovus EnergyCVE11.32▲1.18.74
 
14.84D   W
EncanaECA7.89▼-0.46.90
 
18.54D   W
TourmalineTOU17.70▲0.215.84
 
26.11D   W
Vermilion EnergyVET29.65▼-0.526.67
 
49.67D   W
SERVICES
Pason SystemsPSI19.06▼-2.517.18
 
24.57D   W
EnerflexEFX16.31▼-0.613.55
 
20.38D   W
Mullen Group MTL9.96▼-1.29.39
 
16.93D   W
ShawcorSCL17.55▼-0.315.11
 
28.89D   W
Secure EnergySES6.96▼-2.76.25
 
9.44D   W
REFINING & MARKETING
Parkland FuelPKI40.50▼-1.830.26
 
47.45D   W
S&P 500 ENERGY STOCKS
SPX BULLISH INDICATORS
TOP 5
Helmerich & Payne (HP +3.6%)
Devon Energy (DVN +0.9%)
Noble Energy (NBL +0.7%)
Phillips 66 (PSX +0.3%)
Concho Res (CXO +0.3%)
12-MO
HIGHS
None
SPX BEARISH INDICATORS
BOTTOM
5
Diamondback (FANG -2.1%)
Baker Hughes (BHGE -2.1%)
Cimarex Energy (XEC -1.8%)
Cabot O&G (COG -1.7%)
Marathon Oil (MRO -1.7%)
12-MO
LOWS
Occidental Petro (OXY -0.6%)
Halliburton (HAL +0.1%)
Ntl-Oilwell Varco (NOV -1.1%)
Marathon Petro (MPC 0%)
HollyFrontier (HFC +0.2%)
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Exxon MobilXOM72.16▼-0.664.65
 
87.36D   W
ChevronCVX116.77▼-1.3100.22
 
128.55D   W
MIDSTREAM
Kinder MorganKMI19.91▲0.214.62
 
20.57D   W
Williams CoWMB26.30▼-0.320.36
 
32.22D   W
ONEOKOKE63.84▼-0.750.26
 
71.99D   W
LARGE CAP E&P
ConocoPhillipsCOP60.14▲0.256.75
 
80.24D   W
EOG ResourcesEOG86.43▼-0.982.04
 
133.53D   W
Occidental PetroOXY52.00▼-0.651.04
 
87.67D   W
Anadarko PetroAPC71.34▼-0.240.40
 
76.70D   W
Pioneer Natural ResPXD146.59▼-0.9119.08
 
198.61D   W
SERVICES
SchlumbergerSLB36.18▼-0.934.99
 
70.47D   W
HalliburtonHAL23.01▲0.122.38
 
50.87D   W
Baker HughesBHGE21.70▼-2.120.09
 
36.42D   W
Ntl-Oilwell VarcoNOV21.66▼-1.121.22
 
49.08D   W
TechnipFMCFTI21.87▼-0.618.20
 
33.60D   W
REFINERS
Marathon PetroMPC48.99▼0.048.02
 
88.45D   W
Phillips 66PSX82.75▲0.378.44
 
123.97D   W
Valero EnergyVLO74.86▼-0.368.81
 
126.98D   W
HollyFrontierHFC40.99▲0.240.42
 
83.28D   W
NYSE ADRs
COMPANY TICKER CLOSE %CHG L 52WK H CHART
Royal Dutch ShellRDS.A62.36▼-0.355.04
 
71.85D   W
TotalTOT52.51▼-0.749.70
 
65.69D   W
BPBP41.27▼-0.536.28
 
47.57D   W
EniE30.76▼-0.829.75
 
39.16D   W
EquinorEQNR19.43▼-0.318.91
 
28.93D   W
ANALYST RATINGS

UPGRADES

  • None.

DOWNGRADES

  • Anadarko Petroleum (APC): Downgraded from Buy to Neutral at Seaport Global Securities.

  • TC Energy (TRP.TO): Downgraded from Outperform to Neutral at Credit Suisse.

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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