Energy stocks sell-off in tandem with global equity markets
Today's energy market update:
After posting mixed results on Monday, oil markets were once again mixed on Tuesday. Brent ended the day up 0.3%, moving back above US$65 a barrel, while WTI dipped 0.1%.
The heavy oil discount fell below US$13 a barrel, helping WCS rise 0.4%. Canadian Light rose 1.6%, as its discount to WTI narrowed by another US$0.90 a barrel.
Gasoline and heating oil both gained about 1%, while Henry Hub was little changed. Near month AECO prices once again dipped below US$0.50/MMBtu ($0.60/GJ), but spot prices finally moved back above zero.
Global equity markets mostly posted losses on Tuesday, while treasury and currency markets were little changed.
In New York, the NYSE declined 0.6%, while the NASDAQ fell 1.5%. The S&P 500 Large Cap Index fell almost 1%, with all sectors ending the day flat to lower.
The TSX also declined about 1%. All Canadian sectors also ended the day lower.
Among energy names, the TSX energy basket fell 0.6%, while SPX energy posted a 0.8% loss. Except for US refining stocks, all energy subsectors posted declines on Tuesday.
Today's political news:
The Supreme Court of Canada will hear Saskatchewan's challenge of the federal carbon tax on December 5. The province is appealing a lower court ruling that deemed the tax constitutional. The Alberta government has applied for intervenor status on that case, while launching a similar lawsuit of its own. Another constitutionality case is pending from the Ontario Court of Appeal, after its government launched a similar lawsuit. Saskatchewan was granted intervenor status in that case, which still awaits a final verdict.
Finance Minster Bill Morneau announced $275 million in funding for LNG Canada's $40 billion facility, being built in Kitimat, BC. The funds include $220 million to help the company buy more energy-efficient gas turbines, and another $55 million to replace an old highway bridge in Kitimat. LNG Canada is being led by Royal Dutch Shell, who reported total revenues of US$388 billion last year.
Bad blood continues to simmer between President Trump and Iran after Trump threatened to "obliterate" parts of the country, should there be any further attacks on "anything American." Iranian President Hassan Rouhani responded by calling the White House "mentally retarded." President Trump signed another executive order on Monday, imposing new economic sanctions against Iranian Supreme Leader Ayatollah Ali Khamenei and several other senior officials.
Today's other notable energy news:
The American Petroleum Institute is forecasting a 7.6 million barrel decline in crude stockpiles for last week. Official numbers from the Energy Information Administration are due to be released Wednesday morning.
The International Energy Agency (IEA) says they remain concerned about Middle East tensions and stand "ready to act in an appropriate way." However, Executive Director Faith Birol concedes growing US shale output is keeping oil markets well supplied.
Magellan Midstream Partners is mulling the sale of a 35% stake in its Longhorn crude oil pipeline in Texas, along with other storage assets in the Gulf Coast. The company expects to raise as much as US$2 billion, which will be used to finance its growth projects. The 275,000 bbl/day Longhorn pipeline transports crude from the Permian Basin to refineries and export terminals near Houston.
According to Bloomberg, Argentina's Vaca Muerta has finally shipped its first cargos of light oil and LNG, almost a century after the massive formation was first discovered. Although several oil majors, including state-run YPF, Chevron, Total, Exxon and Shell, have put billions into exploration, lack of infrastructure and government regulations have caused energy exports to decline sharply since the late 1990s. Vaca Muerta holds an estimated 27 billion barrels of recoverable shale, thought to be similar in geology to the Eagle Ford Shale in the US.
UK chemicals firm Linde Group announced plans to spend US$1.4 billion in Singapore to boost its gasification capacity in support of ExxonMobil's planned expansion of its refining and chemicals complex in the region.
|Suncor Energy||SU||41.51||▼-1.2||35.53||55.47||D W|
|Imperial Oil||IMO||36.38||▼-0.7||33.52||44.91||D W|
|Husky Energy||HSE||12.62||0.0||12.27||22.99||D W|
|TC Energy||TRP||64.94||▼-0.8||47.90||66.93||D W|
|Pembina Pipeline||PPL||47.97||▼-1.1||39.15||50.65||D W|
|Inter Pipeline||IPL||20.03||▼-0.4||18.60||25.66||D W|
|Gibson Energy||GEI||23.54||▼-0.8||16.90||24.18||D W|
|LARGE CAP E&P|
|Cdn Natural Res||CNQ||36.31||▼-0.5||30.11||49.08||D W|
|Cenovus Energy||CVE||11.53||▼-0.4||8.74||14.84||D W|
|Vermilion Energy||VET||28.44||▼-0.1||26.54||49.67||D W|
|Pason Systems||PSI||18.40||▼-2.1||17.18||24.57||D W|
|Mullen Group||MTL||9.81||▲0.8||9.36||16.93||D W|
|Secure Energy||SES||7.02||▲0.1||6.25||9.44||D W|
|REFINING & MARKETING|
|Parkland Fuel||PKI||41.35||▼-1.1||31.59||47.45||D W|
|Exxon Mobil||XOM||76.27||▼-0.9||64.65||87.36||D W|
|Kinder Morgan||KMI||20.58||▼-2.7||14.62||21.50||D W|
|Williams Co||WMB||26.79||▼-1.4||20.36||32.22||D W|
|LARGE CAP E&P|
|EOG Resources||EOG||90.04||▼-0.6||80.41||133.53||D W|
|Occidental Petro||OXY||49.38||▼-1.0||47.00||86.60||D W|
|Anadarko Petro||APC||70.09||▼0.0||40.40||76.70||D W|
|Pioneer Natural Res||PXD||148.19||▼-2.1||119.08||195.00||D W|
|Baker Hughes||BHGE||24.62||▼-0.4||20.09||35.55||D W|
|Ntl-Oilwell Varco||NOV||21.24||▼-0.1||19.57||49.08||D W|
|Marathon Petro||MPC||51.39||▼-0.3||45.47||88.45||D W|
|Phillips 66||PSX||89.83||▲0.1||78.44||123.97||D W|
|Valero Energy||VLO||81.63||▲1.1||68.81||122.42||D W|
Storm Resources (SRX.TO): Upgraded from Sector Perform to Outperform at National Bank.
Basic Energy Services (BAS): Downgraded from Overweight to Neutral at Piper Jaffray.
Crew Energy (CR.TO): Downgraded from Outperform to Sector Perform at National Bank.
Delek US (DK): Downgraded from Neutral to Sell at Goldman Sachs.
FTS International (FTSI): Downgraded from Overweight to Neutral at Piper Jaffray.
UPDATED: DAILY (END-OF-DAY)
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