TSX energy stocks nudge up 1%, despite little action in oil markets
Today's energy market action:
A rather dull trading day on Tuesday, with energy, treasury, currency and equity markets mostly ending the day little changed.
Brent and WTI were unchanged, while WCS rose 0.2%. Canadian Light gained 1%, as its discount to WTI narrowed to about US$7.50/bbl.
Gasoline rose 1.5% while Henry Hub moved up almost 2%.
The American Petroleum Institute (API) is forecasting a crude oil build of almost 5 million barrels in the US last week. Official numbers from the Energy Information Administration (EIA) are due to be released Wednesday morning.
Today's currency, treasury and equity market action:
US bond yields were little changed despite a small uptick in the US producer price index. The greenback and Canadian dollar both dipped about 0.1%.
The NYSE rose 0.1% while the NASDAQ, DJIA and S&P 500 were all roughly unchanged. The US energy sector nudged up 0.1%, a fourth consecutive day of gains.
Toronto's TSX rose 0.2%, helped by a 0.8% boost in energy stocks.
Today's supply/demand update:
The EIA lower expectations for total US crude output this year and next by about 1%. The agency now says production will average 12.32 million bbl/day this year, rising to 13.26 million bbl/day in 2020.
Globally, the EIA expects another 2 million bbl/day to be added next year, with 70% of those barrels coming from the US. Unfortunately, global oil demand growth is only forecasted to be 1.4 million bbl/day next year.
Global oil inventories are therefore expected to contract by an average of 300,000 bbl/day this year, then reverse course in 2020, rising by an average of 300,000 bbl/day.
Today's notable energy news:
Alberta's UCP government is in talks with oil producers to potentially take over $3.7 billion in crude-by-rail contracts signed by the previous government. CN Rail and CP Rail have binding deals in place to begin transporting 20,000 bbl/day in July, ramping up to 120,000 bbl/day by the middle of next year. Premier Kenney says he would like to see the private sector take over those agreements, and also warned Alberta's curtailment program may have to be extended into next year, since no new pipeline capacity will come on line by the end of 2019.
Petrobras and partners Total, Shell, CNOOC and CNPC have sanctioned phase 2 of the Mero project, located off the coast of Rio de Janeiro, Brazil. The FSPO will have the capacity to process 180,000 bbl/day and is expected to start-up by 2022. Phase 1 is currently under development, and expected to start-up in 2021. Another two FSPOs could potentially be added in the future.
ExxonMobil has sanctioned development of another unconventional oil field in Argentina's Vaca Muerta basin. The project includes 90 wells, a central production facility and supporting infrastructure. Phase 1 is expected to produce 55,000 boe/day sometime in 2024.
Total announced the start of production from the Culzean gas condensate field, located 230 km offshore Aberdeen, Scotland. Production is expected to peak at 100,000 boe/day, representing about 5% of UK’s total gas consumption. BP and Japan's JX Nippon also own a stake in the field.
Royal Dutch Shell says it has shipped its first LNG cargo from the Prelude Floating Liquefied Natural Gas (FLNG) facility, located 475 km off the coast of Western Australia. Prelude is expected to produce 3.6 million t/y of LNG, 1.3 million t/y of condensate and 0.4 million t/y of LPG. The facility is jointly owned with INPEX, KOGAS and OPIC.
Shell also announced the sale of its Martinez Refinery in California to a subsidiary of PBF Energy for US$1 billion, plus adjustments for inventories and existing contracts. Martinez is a highly complex refinery, with a capacity of 157,000 bbl/day.
|Suncor Energy||SU||40.66||▲0.9||35.53||55.47||D W|
|Imperial Oil||IMO||35.99||▼-0.7||33.52||44.91||D W|
|Husky Energy||HSE||12.55||▲0.7||12.27||22.99||D W|
|TC Energy||TRP||66.00||▼-0.1||47.90||66.93||D W|
|Pembina Pipeline||PPL||48.60||▲0.4||39.15||50.65||D W|
|Inter Pipeline||IPL||20.46||0.0||18.60||25.66||D W|
|Gibson Energy||GEI||22.50||▲1.0||16.90||23.75||D W|
|LARGE CAP E&P|
|Cdn Natural Res||CNQ||36.15||▲1.5||30.11||49.08||D W|
|Cenovus Energy||CVE||11.17||▲1.7||8.74||14.84||D W|
|Vermilion Energy||VET||27.36||▼-2.4||26.67||49.67||D W|
|Pason Systems||PSI||18.87||▲1.0||17.18||24.57||D W|
|Mullen Group||MTL||9.64||▼-1.6||9.39||16.93||D W|
|Secure Energy||SES||6.89||▲0.4||6.25||9.44||D W|
|REFINING & MARKETING|
|Parkland Fuel||PKI||42.14||▼-1.1||31.19||47.45||D W|
|Exxon Mobil||XOM||74.84||▼-0.1||64.65||87.36||D W|
|Kinder Morgan||KMI||20.78||▼-0.4||14.62||21.25||D W|
|Williams Co||WMB||27.63||▲0.6||20.36||32.22||D W|
|LARGE CAP E&P|
|EOG Resources||EOG||86.50||▲1.5||80.41||133.53||D W|
|Occidental Petro||OXY||49.05||▲2.4||47.00||86.76||D W|
|Anadarko Petro||APC||70.09||0.0||40.40||76.70||D W|
|Pioneer Natural Res||PXD||146.13||▲1.0||119.08||195.00||D W|
|Baker Hughes||BHGE||23.16||▼-1.0||20.09||35.55||D W|
|Ntl-Oilwell Varco||NOV||21.30||▲1.5||20.14||49.08||D W|
|Marathon Petro||MPC||47.77||▲0.2||45.47||88.45||D W|
|Phillips 66||PSX||84.71||▼-1.4||78.44||123.97||D W|
|Valero Energy||VLO||76.36||▲0.7||68.81||122.42||D W|
Mplx (MPLX): Upgraded from Neutral to Buy at BofA.
Shell Midstream Partners (SHLX): Downgraded from Neutral to Underperform at Credit Suisse.
UPDATED: DAILY (END-OF-DAY)
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