Oil prices take a sharp tumble, wiping out two months of gains
Today's energy market action:
Oil prices posted a second consecutive day of losses, despite a recovery in equity markets. Brent and WTI both declined almost 4%. Gasoline, heating oil and Henry Hub gas prices all fell about 3%.
The Energy Information Administration reported 282,000 barrel decline in US crude stockpiles for last week, much less than expected. Gasoline stockpiles unexpectedly rose by 2.2 million barrels. Total US output returned to its old record high of 12.3 million bbl/day.
North of the border, Canadian Light and WCS declined 4.3% and 5.5%, respectively. Differentials to WTI were little changed. US imports of Canadian crude contracted by 500,000 bbl/day last week, falling to 3.2 million bbl/day.
Today's currency and equity market action:
The US Bureau of Economic Analysis reported a first quarter GDP of 3.1%, slightly better than expected. Despite the relatively good reading, US bond yields declined slightly on Thursday, sending the short term yield curve further into negative territory. The US dollar was little changed for the day.
After being unchanged for four months, average weekly earnings in Canada rose 0.8% m/m in March, bringing the annualized rate to 1.9%. Canada's current account deficit widened by $700 million in Q1, thanks to more trade activity and a lower investment income deficit. Exports of goods rose by $2.3 billion to $177.1 billion, mainly on higher oil prices. The loonie gained 0.1%, moving back above 74 cents.
Equity markets were mixed on Thursday, with most indices reporting little change for the day. The NYSE rose 0.1%, while the S&P 500 gained 0.2%. Energy was the worst performing sector on the SPX, falling 1.2%, returning to the levels of early January. US midstream stocks were the only notable gainers among energy subsectors for the day.
The TSX declined 0.3%. Energy was also one of the worst performing sectors, falling 1.5%. Producers were the worst hit subsector on Thursday.
Today's notable energy news:
Enbridge says it is continuing to work with Michigan officials over its plan to build a tunnel underneath the Straits of Mackinac, which will house a new Line 5. The company now says it can get the tunnel completed sooner than planned, with construction currently anticipated to commence in 2021. The tunnel will come at a cost of $500 million, with the new Line 5 expected to be put into service by early 2024.
Israeli conglomerate Delek Group and its UK-based subsidiary Ithaca Energy have agreed to purchase Chevron's North Sea assets for U$2 billion. The assets will add about 80,000 boe/day of production capacity, and increase the company's 2P reserves by 225 million boe.
Billionaire and activist investor Carl Icahn is suing Occidental Petroleum for its alleged "fundamentally misguided and hugely overpriced" purchase of Anadarko Petroleum. Icahn owns a significant chunk of Occidental, and will likely seek to replace board members. OXY shares are down over 20% from early April, sinking to a 10-year low this week.
|Suncor Energy||SU||41.92||▼-0.9||35.53||55.47||D W|
|Imperial Oil||IMO||36.69||▼-0.6||33.52||44.91||D W|
|Husky Energy||HSE||12.76||▼-0.8||12.31||22.99||D W|
|TC Energy||TRP||65.31||▼-0.4||47.90||66.93||D W|
|Pembina Pipeline||PPL||48.23||▲0.2||39.15||50.65||D W|
|Inter Pipeline||IPL||20.88||▼-0.7||18.60||25.66||D W|
|Gibson Energy||GEI||22.19||▼-0.3||16.90||23.75||D W|
|LARGE CAP E&P|
|Cdn Natural Res||CNQ||36.53||▼-0.8||30.11||49.08||D W|
|Cenovus Energy||CVE||11.26||▼-0.5||8.74||14.84||D W|
|Vermilion Energy||VET||28.76||▼-2.2||26.67||49.67||D W|
|Pason Systems||PSI||19.26||▲1.1||17.18||24.57||D W|
|Mullen Group||MTL||9.70||▼-2.1||9.39||16.93||D W|
|Secure Energy||SES||6.95||▲0.2||6.25||9.44||D W|
|REFINING & MARKETING|
|Parkland Fuel||PKI||41.06||▲1.4||30.98||47.45||D W|
|Exxon Mobil||XOM||71.97||▼-0.3||64.65||87.36||D W|
|Kinder Morgan||KMI||20.06||▲0.8||14.62||20.57||D W|
|Williams Co||WMB||26.63||▲1.3||20.36||32.22||D W|
|LARGE CAP E&P|
|EOG Resources||EOG||83.96||▼-2.9||82.04||133.53||D W|
|Occidental Petro||OXY||51.91||▼-0.2||51.04||87.67||D W|
|Anadarko Petro||APC||70.92||▼-0.6||40.40||76.70||D W|
|Pioneer Natural Res||PXD||144.43||▼-1.5||119.08||198.61||D W|
|Baker Hughes||BHGE||21.17||▼-2.4||20.09||36.42||D W|
|Ntl-Oilwell Varco||NOV||21.07||▼-2.7||20.86||49.08||D W|
|Marathon Petro||MPC||47.11||▼-3.8||46.95||88.45||D W|
|Phillips 66||PSX||82.06||▼-0.8||78.44||123.97||D W|
|Valero Energy||VLO||72.87||▼-2.7||68.81||126.98||D W|
KLX Energy Services (KLXE): Downgraded from Overweight to Neutral at Piper Jaffray.
UPDATED: DAILY (END-OF-DAY)
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• OIL PRICES, FUTURES AND DIFFERENTIALS IN USD/BBL
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