Energy stocks dip lower as IEA warns world oil supply is "plentiful"

Energy stocks dip lower as IEA warns world oil supply is "plentiful"

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Today's energy market update:

  • Despite a demand downgrade by the International Energy Agency (IEA), crude oil benchmarks all moved higher on Friday, posting a second consecutive day of gains. Brent rose over 1%, while WTI and Canadian Light rose 0.4%. WCS and Edmonton Condensate (C5+) rose 0.7%, as differentials to WTI slightly narrowed.

  • For the week, Brent ended Friday 2% lower, WTI declined 2.7%, Canadian Light fell 1.4%, while WCS and C5+ slumped 2.4%.

  • Henry Hub rose almost 3% for the day, and posted a 2% increase for the week, the first weekly gain in four weeks.

Today's currency and equity market update:

  • Disappointing industrial production data out of China and dismal economic data out of Australia boosted expectations for lower interest rates and more stimulus, giving most global markets a boost overnight. 

  • Strong US retail sales and a pick up in industrial production helped the greenback move up 0.6% for the day, bringing this week's gains to about 1%. US bonds yields were little changed. The US Federal Reserve is due to announce their next interest rate decision on Tuesday.

  • The loonie declined 0.8%, wiping out all gains for the week, and ending Friday back below 75 cents.

  • US equity markets opened lower on Friday morning, but recovered most of their losses by the end of the trading day. The NYSE dipped 0.3% for the day, pairing this week's gain to just 0.2%. The S&P 500 also dipped 0.2% for the day, but rose 0.5% for the week. In Toronto, the TSX gained 0.4% for the day, ending the week 0.4% higher.

  • In the energy space, SPX energy declined 0.7% on Friday, bringing the weekly loss to 0.5%. TSX energy also declined 0.4%, bringing the weekly loss to 0.6%, an eighth consecutive week of declines.

Today's supply/demand update:

  • US drillers took one oil rig out of service last week, leaving 788 in operation, the lowest since February 2018. Canada gained 10 oil rigs, bringing the total to 69.

  • The IEA says slowing global trade, a warm winter in Japan, a slowdown in Europe's petrochemicals industry, and tepid demand for gasoline and diesel in the US, has dented global demand growth by 100,000 bbl/day this year to 1.2 million bbl/day. First quarter growth was only 300,000 bbl/day, the lowest since the end of 2011. Demand is forecasted to rebound to 1.4 million bbl/day next year. 

  • The IEA also says non-OPEC supply growth is "plentiful," forecasted at 1.9 million bbl/day this year, led largely by the US and, to a much smaller extent, Brazil and Canada. Non-OPEC production is expected to rise by another 2.3 million bbl/day next year.

  • Iranian production fell by 210,000 bbl/day in May to 2.4 million bbl/day, the lowest since the Iran-Iraq conflict of the 1980s.

  • The head of Russia's Gazprom Neft says OPEC+ should raise output in the second half of the year, noting that US$55-60 oil is a perfectly "acceptable" price for Russia. OPEC+ is officially scheduled to meet on June 26, although the cartel has yet to confirm rumours that the meeting has been postposed to early July. OPEC has generally agreed to extend its existing production quotas to the end of this year, although Russia has yet to formally announce a decision.

Today's other notable energy news:

  • Petrobras finally closed on the sale of its 90% stake in the Transportadora Associada de Gas (TAG) to French gas distributor Engie and the Caisse de Dépôt et Placement du Québec, for net proceeds of US$8.7 billion. Petrobras will continue to operate the pipeline network.

  • According to India media, Total is poised to buy a 30% stake in India's Adani Gas for more than US$800 million. Adani Gas operates a pipeline network that spans over 6,000 kms, delivering natural gas to 350,000 customers.

OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$62.01▲1.150.47
 
86.29
WTI$52.51▲0.442.53
 
76.41
CDN LT$45.48▲0.420.83
 
69.32
C5+$47.04▲0.737.04
 
71.40
WCS$39.51▲0.712.59
 
56.30

CRUDE OIL FUTURES CURVES
BRENT
WTI
█ JUN 14   █ JUN 7   █ MAY 31   █ MAY 24   (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
Gibson Energy (GEI +3.3%)
Nuvista Energy (NVA +2.4%)
Parex Resources (PXT +1.6%)
Cenovus Energy (CVE +1.3%)
Enbridge (ENB +1.1%)
12-MO
HIGHS
None
TSX BEARISH INDICATORS
BOTTOM
5
Encana (ECA -5%)
Gran Tierra (GTE -4.3%)
Seven Generations (VII -3.9%)
Peyto Exploration (PEY -3.2%)
CES Energy (CEU -3.1%)
12-MO
LOWS
Encana (ECA -5%)
Tourmaline (TOU -2.2%)
Vermilion Energy (VET -1%)
Enerplus (ERF -2.9%)
Gran Tierra (GTE -4.3%)
Kelt Exploration (KEL -1.8%)
Seven Generations (VII -3.9%)
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Suncor EnergySU41.59▲0.735.53
 
55.47D   W
Imperial OilIMO36.14▲0.533.52
 
44.91D   W
Husky EnergyHSE12.70▼-0.712.27
 
22.99D   W
MIDSTREAM
EnbridgeENB46.25▲1.139.40
 
51.22D   W
TC EnergyTRP65.66▲0.247.90
 
66.93D   W
Pembina PipelinePPL48.36▲0.839.15
 
50.65D   W
Inter PipelineIPL19.96▼-0.218.60
 
25.66D   W
Keyera KEY32.25▼-1.224.05
 
38.91D   W
Gibson EnergyGEI22.90▲3.316.90
 
23.75D   W
LARGE CAP E&P
Cdn Natural ResCNQ35.57▼0.030.11
 
49.08D   W
Cenovus EnergyCVE11.36▲1.38.74
 
14.84D   W
EncanaECA6.25▼-5.06.21
 
18.54D   W
TourmalineTOU15.56▼-2.215.39
 
25.79D   W
Vermilion EnergyVET26.78▼-1.026.63
 
49.67D   W
SERVICES
Pason SystemsPSI18.72▼-0.117.18
 
24.57D   W
EnerflexEFX16.18▲0.113.55
 
20.38D   W
Mullen Group MTL9.52▼-0.19.39
 
16.93D   W
ShawcorSCL17.24▼-0.415.11
 
28.89D   W
Secure EnergySES6.74▼-1.66.25
 
9.44D   W
REFINING & MARKETING
Parkland FuelPKI42.04▲1.031.27
 
47.45D   W
S&P 500 ENERGY STOCKS
SPX BULLISH INDICATORS
TOP 5
Phillips 66 (PSX +0.4%)
Marathon Petro (MPC +0.1%)
Kinder Morgan (KMI +0.1%)
12-MO
HIGHS
None
SPX BEARISH INDICATORS
BOTTOM
5
Noble Energy (NBL -5%)
Helmerich & Payne (HP -3.7%)
Cimarex Energy (XEC -3.6%)
Ntl-Oilwell Varco (NOV -3.5%)
Apache (APA -3.1%)
12-MO
LOWS
Ntl-Oilwell Varco (NOV -3.5%)
Cimarex Energy (XEC -3.6%)
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Exxon MobilXOM74.35▼-0.464.65
 
87.36D   W
ChevronCVX120.81▼-0.1100.22
 
128.55D   W
MIDSTREAM
Kinder MorganKMI20.53▲0.114.62
 
21.25D   W
Williams CoWMB26.99▼-1.420.36
 
32.22D   W
ONEOKOKE64.46▼-0.950.26
 
71.99D   W
LARGE CAP E&P
ConocoPhillipsCOP58.82▼-0.456.75
 
80.24D   W
EOG ResourcesEOG85.17▼-1.680.41
 
133.53D   W
Occidental PetroOXY49.31▼-0.847.00
 
86.60D   W
Anadarko PetroAPC69.83▼-0.340.40
 
76.70D   W
Pioneer Natural ResPXD141.58▼-1.2119.08
 
195.00D   W
SERVICES
SchlumbergerSLB35.93▼-2.334.46
 
69.61D   W
HalliburtonHAL21.38▼-1.320.98
 
48.12D   W
Baker HughesBHGE22.15▼-2.820.09
 
35.55D   W
Ntl-Oilwell VarcoNOV20.00▼-3.519.57
 
49.08D   W
TechnipFMCFTI22.74▼-0.718.20
 
33.60D   W
REFINERS
Marathon PetroMPC47.96▲0.145.47
 
88.45D   W
Phillips 66PSX85.59▲0.478.44
 
123.97D   W
Valero EnergyVLO76.76▼-0.768.81
 
122.42D   W
HollyFrontierHFC40.30▼-0.337.73
 
76.58D   W
NYSE ADRs
COMPANY TICKER CLOSE %CHG L 52WK H CHART
Royal Dutch ShellRDS.A63.43▼-0.555.04
 
71.85D   W
TotalTOT53.18▲0.749.70
 
65.69D   W
BPBP40.91▼-0.836.28
 
47.25D   W
EniE31.27▼-0.229.75
 
39.16D   W
EquinorEQNR19.44▼-0.318.91
 
28.93D   W
ANALYST RATINGS

UPGRADES

  • None.

DOWNGRADES

  • Transocean (RIG): Downgraded from Buy to Neutral at Citigroup.

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
• PRICE CHARTS PROVIDED BY STOCKCHARTS.COM ARE 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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