Gasoline prices spike higher after largest refinery on East Coast announces plans to shutdown
Today's energy market update:
Oil prices got a boost from a much bigger-than-expected drawdown in US crude stockpiles.
WTI rose almost 3% while Brent gained just over 2%. Canadian Light moved up 0.7%, as its discount to WTI widened by US$1.15 a barrel, reversing yesterday's decline. WCS rose 3.3%, as the heavy oil discount was little changed.
Gasoline prices jumped 5% after the largest refinery on the East Coast announced plans to permanently cease operations later this month. Heating oil also rose 2.5%, while Henry Hub slipped almost 1%.
The Energy Information Administration reported a whopping 12.8 million barrel decline in US crude stockpiles for last week, the largest drawdown since last September. About half of those barrels came from the Gulf Coast. Total US output dropped to 12.1 million bbl/day, down from a record 12.4 million bbl/day in early June, while exports hit a record 3.8 million bbl/day.
Today's currency and equity market action:
The US Federal Reserve downplayed expectations for aggressive rate cuts in the near term, sending US and global bond yields higher. Despite the news, the greenback was unchanged for the day.
After a sizeable run-up in recent weeks, the Japanese yen and Swiss franc, two safe-haven currencies, both corrected on Wednesday. The loonie rose 0.3%, moving back above 76 cents.
Equity markets were mixed on Wednesday, as rate-sensitive defensive stocks mostly moved lower. The NSYE dipped 0.2%, while the NASDAQ rose 0.3%. In Toronto, the TSX declined 0.4%.
Energy was the best performing sector on both sides of the border, rising 1.5% on the SPX, and 1.6% on the TSX. All energy subsectors moved higher on Wednesday, with US refining stocks posting the biggest gains.
Today's other notable energy news:
Pieridae Energy announced a deal to purchase all of Royal Dutch Shell’s midstream and upstream assets in the Alberta Foothills for $190 million. The assets produce about 28,623 boe/day, consisting of 120 MMcf/day of natural gas and about 8,810 bbl/day of liquids. Pieridae will also takeover three sour gas processing plants, with a combined capacity of approximately 750 MMcf/day. The acquisition helps the company secure enough gas and financing to move forward on its $10 billion Goldboro LNG project in Nova Scotia, which is still awaiting a positive final investment decision.
Philadelphia Energy Solutions (PES) is expected to shutdown its 335,000 bbl/day refinery "within the next month," after a fire ripped through the complex late last week. The company has been struggling financially in recent years, and emerged from bankruptcy just last summer. The PES Philadelphia Refining Complex is the oldest and largest refining complex on the Eastern Seaboard, dating back to 1866, and employing over 1,000 people. Original owners Carlyle Group and Sunoco (a subsidiary of Energy Transfer Partners) still own a minority stake in the facility, while Credit Suisse and Bardin Hill became majority owners after bankruptcy proceedings. The move is expected to put a major squeeze on gasoline supplies on the East Coast.
A Texas court dismissed all claims against Kinder Morgan's US$2 billion Permian Highway Pipeline (PHP), allowing the company to begin construction. The lawsuit was launched by two landowners, who accuse state regulators of failing to consult with stakeholders, taking issue with the state's permitting process. PHP will transport up to 2.1 Bcf/day of natural gas, about 430 miles from the Waha area to other parts of Texas.
TechnipFMC has agreed to pay US$300 million to settle anti-corruption charges in Brazil and the US, dating back over 10 years. CEO Doug Pferdehirt says the actions were "taken by former employees" and "does not reflect the core values" of the company. The company is still working with French officials to settle a similar case.
|Suncor Energy||SU||41.43||▼-0.2||35.53||55.47||D W|
|Imperial Oil||IMO||36.64||▲0.7||33.52||44.91||D W|
|Husky Energy||HSE||12.89||▲2.1||12.27||22.99||D W|
|TC Energy||TRP||64.90||▼-0.1||47.90||66.93||D W|
|Pembina Pipeline||PPL||47.98||▲0.0||39.15||50.65||D W|
|Inter Pipeline||IPL||20.13||▲0.5||18.60||25.66||D W|
|Gibson Energy||GEI||23.42||▼-0.5||16.90||24.18||D W|
|LARGE CAP E&P|
|Cdn Natural Res||CNQ||36.54||▲0.6||30.11||49.08||D W|
|Cenovus Energy||CVE||11.78||▲2.2||8.74||14.84||D W|
|Vermilion Energy||VET||29.26||▲2.9||26.54||49.67||D W|
|Pason Systems||PSI||18.58||▲1.0||17.18||24.57||D W|
|Mullen Group||MTL||9.86||▲0.5||9.36||16.93||D W|
|Secure Energy||SES||7.29||▲3.9||6.25||9.44||D W|
|REFINING & MARKETING|
|Parkland Fuel||PKI||41.38||▲0.1||31.59||47.45||D W|
|Exxon Mobil||XOM||76.60||▲0.4||64.65||87.36||D W|
|Kinder Morgan||KMI||20.64||▲0.3||14.62||21.50||D W|
|Williams Co||WMB||27.50||▲2.7||20.36||32.22||D W|
|LARGE CAP E&P|
|EOG Resources||EOG||93.09||▲3.4||80.41||133.53||D W|
|Occidental Petro||OXY||50.42||▲2.1||47.00||86.60||D W|
|Anadarko Petro||APC||70.49||▲0.6||40.40||76.70||D W|
|Pioneer Natural Res||PXD||151.24||▲2.1||119.08||195.00||D W|
|Baker Hughes||BHGE||24.75||▲0.5||20.09||35.55||D W|
|Ntl-Oilwell Varco||NOV||21.58||▲1.6||19.57||49.08||D W|
|Marathon Petro||MPC||54.21||▲5.5||45.47||88.45||D W|
|Phillips 66||PSX||92.76||▲3.3||78.44||123.97||D W|
|Valero Energy||VLO||84.93||▲4.0||68.81||122.42||D W|
UPDATED: DAILY (END-OF-DAY)
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