Energy stocks rebound slightly on Friday, paring losses for the week
Today's energy market action:
Brent and WTI were little changed for the day, but closed out the week about 2% lower.
Canadian Light and Western Canadian Select (WCS) were also little changed on Friday. Edmonton Condensate (C5+) rose 0.4%, as the discount to WTI narrowed to about US$4.30 per barrel. Canadian benchmarks also lost about 2% this week, posting a third consecutive week of declines.
Henry Hub declined about 1% of Friday, after the Energy Information Administration reported unusually high gas injections for this time of year due to mild weather and strong gas production rates.
Today's currency and equity market action:
The US economy added 263,000 new jobs last month, much more than expected, and sending the unemployment rate to 3.6%. February and March figures were revised higher as well. Wage growth is tracking at 3.2%.
Despite the good news, the US dollar sank 0.3% on Friday, bringing the weekly loss to 0.5%. The Canadian dollar rose 0.3%, ending the week at almost 74.50 cents.
Traders in the US were in a good mood on Friday, sending all markets higher, particularly smaller cap names. The NYSE rose 0.8% while the NASDAQ gained 1.6%. The S&P 500 rose about 1%, with all sectors ending the day in the positive. The SPX energy sector rose 0.8% for the day, but lost over 3% for the week.
In Toronto, the TSX rose a more modest 0.5%. Canadian markets were in offensive mode, with materials and energy stocks leading to the upside. The TSX energy basket gained 1% for the day, reducing the weekly loss to 5.5%.
Today's crude oil supply update:
Two new oil rigs were put into service this week in the US, bringing the total to 807. Canada lost two rigs, leaving 17 oil rigs in service.
Iran's production is expected to fall from 1 million bbl/day in April to less than 500,000 bbl/day in May, and likely stay at those levels going forward. The country is expected to continue selling crude to both India and China, used as part of a debt repayment plan. The country exported 2.5 million bbl/day in April of 2018, before the US announced plans to reinstate sanctions. Iran has since stopped reporting production numbers to OPEC.
Despite pleas from President Trump and falling output from both Iran and Venezuela, Saudi Arabia says it expects to keep production steady at 10 million bbl/day in May, still well below its quota of 10.3 million bbl/day. The kingdom reportedly needs a Brent price of at least US$70 to help fund its spending plans.
Today's other notable energy news:
TransCanada officially changed its name to TC Energy today, reflecting its growing presence in the US and Mexico. CEO Russ Girling says he has no plans to move the company's head office out of Calgary.
Plains Midstream Canada (PMC) announced plans to build a new 50,000 bbl/day terminal in Mitsue, Alberta. The terminal connects Rangeland Midstream's new crude oil gathering and diluent distribution system to PMC's Rainbow pipeline, providing access to the Edmonton market. PMC is a subsidiary of Plains All American Pipeline. Texas-based Rangeland is backed by venture capital firm EnCap Flatrock Midstream.
ExxonMobil has sanctioned Phase 2 of its Liza development offshore Guyana. This latest phase will add 220,000 bbl/day of production capacity by the middle 2020. The first phase of 120,000 bbl/day is on track for first oil by Q1/2020. Exxon says it is targeting 750,000 bbl/day by 2025. Liza is jointly owned with Hess and CNOOC.
Royal Dutch Shell is reportedly looking to sell its 35% stake in the US$15 billion Abadi LNG project, located offshore Indonesia. The stake is estimated to be worth about US$1 billion.
Today's notable first quarter earnings:
TransCanada posted a first quarter net profit of $1.0 billion, up 37% from the first quarter of 2018. Revenues dipped 2% y/y to $3.5 billion. The company has $30 billion in secured growth projects under development, $7 billion of which should be completed by the end of this year. TransCanada also says the Nebraska Supreme Court should render a verdict on the validity of Keystone XL's approved routing before the summer.
First quarter earnings at Pembina Pipeline dipped 5% y/y to $313 million. Cash flow from operations rose 22% y/y to $608 million. Volumes rose 4% y/y to 3.4 million boe/day, including 2.5 million bbl/day shipped through its Pipelines Division. Pembina says it remains committed to its Jordan Cove LNG terminal, but plans to limit capital spending as it awaits regulatory approval from FERC and the state of Oregon. The company also sanctioned an eighth phase of expansion on its Peace Pipeline system, and raised its monthly dividend 5.3% to $0.19 per share.
Net profits at Seven Generations declined to $10.8 million, about half the same quarter last year. Revenues declined 16% y/y to $546 million, mostly due to lower realized prices for condensate and NGLs. Volumes averaged 197,400 boe/day, weighted 59% liquids, and up 5% y/y.
Advantage Oil and Gas posted a Q1 profit of $681,000 in Q1, down from $10 million for the same time last year. Production rose 13% to 44,900 boe/day, including an 84% increase in liquids production. The company cut its 2019 capital spending budget by $10 million, now expected to be between $180 and $200 million. Production is expected to average about 45,000 boe/day this year.
Accommodations provider Black Diamond Group posted a first quarter loss of $2.7 million. Revenues rose 11% y/y to $45.4 million. Outside of Canada, the company says it expects strong demand with modest capital investment expected this year.
Enerflex posted a $17 million profit in Q1, up 6.1% y/y. Revenues rose 26% to $485 million. The company says it saw improved results across all product lines, particularly Engineered Systems. Enerflex's backlog declined from $1.4 billion in Q4/2018 to $1.2 billion in the first quarter of this year.
Murphy Oil posted a first quarter profit of US$40 million, down from US$168 million for the same time last year. Revenues rose 58% to US$591 million, while net production averaged 191,841 bbl/day, up 15% y/y.
EOG Resources posted a net profit of US$635 million, little changed from the previous year. Operating revenues rose 10% to US$4.1 billion. Production rose 17% y/y to 774,000 boe/day.
Noble Energy posted a net loss of US$313 million, down from a US$554 million profit from the same quarter last year. First quarter volumes averaged 337,000 boe/day, while revenues declined 18% y/y to US$1.1 billion.
Adjusted earnings at Equinor declined 5% y/y to US$4.2 billion in the first quarter. Production held steady at 2.18 million boe/day, while revenues declined 17% to US$16.4 billion.
|Suncor Energy||SU||43.47||▲2.0||35.53||55.47||D W|
|Imperial Oil||IMO||38.61||▲0.8||33.52||44.91||D W|
|Husky Energy||HSE||14.04||▲0.3||13.21||22.99||D W|
|Pembina Pipeline||PPL||47.54||▲0.7||39.15||50.65||D W|
|Inter Pipeline||IPL||21.25||▼-0.5||18.60||25.66||D W|
|Gibson Energy||GEI||21.74||▼-0.1||16.40||23.75||D W|
|LARGE CAP E&P|
|Cdn Natural Res||CNQ||37.73||▼-0.1||30.11||49.08||D W|
|Cenovus Energy||CVE||12.13||▼-1.1||8.74||14.84||D W|
|Vermilion Energy||VET||32.28||▲1.0||26.67||49.67||D W|
|Pason Systems||PSI||20.47||▼-1.4||17.18||24.57||D W|
|Mullen Group||MTL||9.75||▲3.1||9.39||16.93||D W|
|Secure Energy||SES||7.52||▲1.5||6.25||9.44||D W|
|REFINING & MARKETING|
|Parkland Fuel||PKI||41.78||▲0.4||30.01||47.45||D W|
|Exxon Mobil||XOM||77.47||▲0.3||64.65||87.36||D W|
|Kinder Morgan||KMI||19.53||▲0.9||14.62||20.44||D W|
|Williams Co||WMB||27.59||▲0.5||20.36||32.22||D W|
|LARGE CAP E&P|
|EOG Resources||EOG||90.90||▲2.0||82.04||133.53||D W|
|Occidental Petro||OXY||57.95||▲1.1||56.83||87.67||D W|
|Anadarko Petro||APC||72.72||▲1.6||40.40||76.70||D W|
|Pioneer Natural Res||PXD||156.09||▲1.7||119.08||213.40||D W|
|Baker Hughes||BHGE||24.13||▲2.6||20.09||37.76||D W|
|Ntl-Oilwell Varco||NOV||25.41||▲1.9||24.04||49.08||D W|
|Marathon Petro||MPC||59.96||▲2.2||54.29||88.45||D W|
|Phillips 66||PSX||89.56||▲0.5||78.44||123.97||D W|
|Valero Energy||VLO||88.44||▲0.2||68.81||126.98||D W|
Crew Energy (CR.TO): Downgraded from Outperform to Market Perform at Raymond James.
Enerflex (EFX.TO): Downgraded from Outperform to Sector Perform at National Bank.
Source Energy Service (SHLE.TO): Downgraded from Outperform to Sector Perform at AltaCorp Capital.
UPDATED: DAILY (END-OF-DAY)
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