Oil prices slide after Russia warns of excess global capacity

Oil prices slide after Russia warns of excess global capacity

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Today's energy market action:

  • After two consecutive days of gains late last week, oil prices moved lower on Monday, after Russia warned there's too much global supply capacity. Brent and WTI both slid about 1.5% for the day.

  • Canadian Light declined 1.7%, while Western Canadian Select (WCS) fell almost 2%, once again falling below US$40. Differentials to WTI were roughly unchanged.

  • Gasoline prices also gave back 0.5%, while Henry Hub edged up 0.9%.

Today's currency, treasury and equity market action:

  • Traders breathed a sigh of relief on Monday, after the US reversed plans to impose a 5% tariff on all imports from Mexico. Bond yields mostly moved higher on Monday, while the US dollar gained 0.2%. The loonie was little changed for the day.

  • The NYSE and DJIA both rose 0.3%. The S&P 500 Large Cap Index also moved up 0.5%. US markets were in offensive mode, with discretionary and technology stocks leading to the upside. Energy stocks gained a more modest 0.3%, as midstream stocks dragged to the downside.

  • In Toronto, the TSX dipped 0.1%, dragged lower by industrial, energy and precious metals stocks. The TSX energy sector declined 0.6%, reversing all of Friday's gains. All subsectors posted losses for the day.

Today's supply update:

  • Russia's finance minister spooked oil markets earlier in the day, warning prices could collapse to as low as US$30 a barrel, if OPEC and friends did not agree to extend curtailments. Russia has yet to decide whether or not it will extend its 10.8 million bbl/day production quota beyond June. 

  • Saudi Arabia's energy minister says he continues to work with Russian counterparts to avoid a sharp decline in oil prices. OPEC+ plans to meet in Vienna on July 2, 2019.

  • China’s crude oil imports fell about 6% m/m to 40.2 million tonnes in May, blamed on refinery maintenance and a drop in Iranian imports.

Today's notable energy news:

  • After being taken offline last week due to encroaching forest fires, Canadian Natural Resources (CNRL) says it has since restarted production at both its Pelican Lake and Woodenhouse operations, restoring an estimated 65,000 bbl/day of output. The company says overall production volumes for the month of June will likely not be impacted, since any lost barrels were mitigated by boosting output at facilities that were curtailed under the province's production quotas.

  • Encana reminded shareholders that it has repurchased 10% of its outstanding shares so far this year (at a cost of $1.04 billion), and plans to buyback another $213 million of its shares beginning in July. The company also terminated its production sharing contract offshore China with CNOOC, effectively exiting the country. Encana averaged 320,000 bbl/day of liquids so far in the second quarter, up 10% from the previous quarter. Full year capital spending plans were left unchanged at about $2.8 billion. Full-year production guidance was also unchanged at 560,000 to 600,000 boe/day. Encana stock touched a 3-year low last week.

  • Devon Energy announced a voluntary plan to cut methane emissions across its US-operations. By 2025, the company says it plans to lower methane-intensity to a maximum of 0.28%, down from a current estimate of 0.32%.

  • Comstock Resources announced a deal to acquire privately-held Covey Park for about US$2.2 billion in cash and stock, including US$1.1 billion in debt. Covey Park is a natural gas player, operating primarily in the Haynesville shale basin.

Today's US pipeline update:

  • Phillips 66 and Plains All American Pipeline announced a new 50/50 joint-venture for construction of the Red Oak Pipeline system. Red Oak will transport 400,000 bbl/day of crude from Cushing and the Permian Basin to the Texas Gulf Coast. The line is expected to commence service in first quarter of 2021.

  • Phillips 66 and Bridger Pipeline also announced a 50/50 joint-venture to construct the US$1.6 billion Liberty Pipeline, which will run from the Rockies and Bakken regions to Cushing, Oklahoma. The 350,000 bbl/day pipeline is also expected to begin service in the first quarter of 2021.

OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$62.29▼1.650.47
 
86.29
WTI$53.26▼1.442.53
 
76.41
CDN LT$45.36▼1.720.83
 
69.32
C5+$47.43▼1.537.04
 
71.40
WCS$39.71▼1.912.59
 
56.30

CRUDE OIL FUTURES CURVES
BRENT
WTI
█ JUN 10   █ JUN 3   █ MAY 27   █ MAY 20   (USD/BBL)
MARKET OVERVIEW
MARKETS
CURRENCIES & YIELDS
TSX SECTORS
TSX SECTORS - 52WK
SPX SECTORS
SPX SECTORS - 52WK
ENERGY SECTORS

TSX ENERGY SUB-SECTORS

SPX ENERGY SUB-SECTORS
TSX ENERGY STOCKS
TSX BULLISH INDICATORS
TOP 5
MEG Energy (MEG +1.4%)
Parkland Fuel (PKI +1%)
CES Energy (CEU +0.9%)
PrairieSky (PSK +0.6%)
Encana (ECA +0.5%)
12-MO
HIGHS
None
TSX BEARISH INDICATORS
BOTTOM
5
Kelt Exploration (KEL -6.6%)
Peyto Exploration (PEY -4.6%)
ARC Resources (ARX -4.2%)
Birchcliff Energy (BIR -4%)
Enerplus (ERF -4%)
12-MO
LOWS
ARC Resources (ARX -4.2%)
Enerplus (ERF -4%)
Nuvista Energy (NVA -4%)
Peyto Exploration (PEY -4.6%)
Seven Generations (VII -3.6%)
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Suncor EnergySU40.30▼-0.535.53
 
55.47D   W
Imperial OilIMO36.26▼-0.533.52
 
44.91D   W
Husky EnergyHSE12.46▼-0.112.27
 
22.99D   W
MIDSTREAM
EnbridgeENB46.95▼-0.439.40
 
51.22D   W
TC EnergyTRP66.08▼-0.847.90
 
66.93D   W
Pembina PipelinePPL48.400.039.15
 
50.65D   W
Inter PipelineIPL20.46▲0.218.60
 
25.66D   W
Keyera KEY32.42▲0.424.05
 
38.91D   W
Gibson EnergyGEI22.27▲0.316.90
 
23.75D   W
LARGE CAP E&P
Cdn Natural ResCNQ35.62▲0.330.11
 
49.08D   W
Cenovus EnergyCVE10.98▲0.48.74
 
14.84D   W
EncanaECA6.73▲0.56.53
 
18.54D   W
TourmalineTOU16.58▼-2.415.84
 
25.79D   W
Vermilion EnergyVET28.02▼-1.526.67
 
49.67D   W
SERVICES
Pason SystemsPSI18.69▼-1.317.18
 
24.57D   W
EnerflexEFX15.98▼-2.013.55
 
20.38D   W
Mullen Group MTL9.80▼-0.19.39
 
16.93D   W
ShawcorSCL17.16▼-0.615.11
 
28.89D   W
Secure EnergySES6.86▼-1.66.25
 
9.44D   W
REFINING & MARKETING
Parkland FuelPKI42.61▲1.031.16
 
47.45D   W
S&P 500 ENERGY STOCKS
SPX BULLISH INDICATORS
TOP 5
Noble Energy (NBL +1.7%)
Devon Energy (DVN +1.7%)
Cimarex Energy (XEC +1.6%)
Valero Energy (VLO +1.5%)
Marathon Petro (MPC +1.5%)
12-MO
HIGHS
None
SPX BEARISH INDICATORS
BOTTOM
5
Cabot O&G (COG -5%)
Helmerich & Payne (HP -2.4%)
Kinder Morgan (KMI -1.2%)
Williams Co (WMB -1%)
Concho Res (CXO -0.7%)
12-MO
LOWS
None
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Exxon MobilXOM74.91▲0.464.65
 
87.36D   W
ChevronCVX122.29▲0.7100.22
 
128.55D   W
MIDSTREAM
Kinder MorganKMI20.88▼-1.214.62
 
21.25D   W
Williams CoWMB27.48▼-1.020.36
 
32.22D   W
ONEOKOKE65.82▼-0.350.26
 
71.99D   W
LARGE CAP E&P
ConocoPhillipsCOP59.26▲0.556.75
 
80.24D   W
EOG ResourcesEOG85.20▲0.780.41
 
133.53D   W
Occidental PetroOXY47.90▲0.147.00
 
86.76D   W
Anadarko PetroAPC70.07▲0.040.40
 
76.70D   W
Pioneer Natural ResPXD144.73▼-0.2119.08
 
196.38D   W
SERVICES
SchlumbergerSLB35.47▼-0.434.46
 
70.47D   W
HalliburtonHAL21.76▲0.620.98
 
48.89D   W
Baker HughesBHGE23.41▲0.420.09
 
35.55D   W
Ntl-Oilwell VarcoNOV20.98▲0.720.14
 
49.08D   W
TechnipFMCFTI22.72▲0.618.20
 
33.60D   W
REFINERS
Marathon PetroMPC47.68▲1.545.47
 
88.45D   W
Phillips 66PSX85.90▲0.478.44
 
123.97D   W
Valero EnergyVLO75.86▲1.568.81
 
122.42D   W
HollyFrontierHFC40.22▲0.337.73
 
77.47D   W
NYSE ADRs
COMPANY TICKER CLOSE %CHG L 52WK H CHART
Royal Dutch ShellRDS.A64.28▼-0.355.04
 
71.85D   W
TotalTOT53.73▲0.749.70
 
65.69D   W
BPBP42.08▼-0.136.28
 
47.39D   W
EniE31.45▼-0.629.75
 
39.16D   W
EquinorEQNR19.81▼-0.518.91
 
28.93D   W
ANALYST RATINGS

UPGRADES

  • None.

DOWNGRADES

  • Halliburton (HAL): Downgraded from Buy to Hold at Edward Jones.

  • Sinopec Shanghai Petrochemical (SHI): Downgraded from Overweight to Underweight at JPMorgan.

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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