TSX energy stocks continue to unwind the June rally, despite decent recovery in crude prices

TSX energy stocks continue to unwind the June rally, despite decent recovery in crude prices

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Today's energy market update:

  • A relatively quiet Thursday for global crude benchmarks, as traders await any new data from the upcoming OPEC+ meeting early next week.

  • Brent, WTI and WCS all nudged up 0.1%. Canadian Light rose 1%, as its discount to WTI narrowed to US$5 a barrel.

  • After moving up sharply yesterday, gasoline and heating oil both retreated about 1%. Henry Hub rose 2.5%.

Today's notable economic news:

  • The US economy expanded 3.1% y/y in the first quarter of this year, up from a GDP growth reading of 2.2% in the fourth quarter of 2018.

  • After being stagnant for several months, Canadian weekly payrolls finally moved up 0.7% m/m in April to $1,023, bringing annualized gains to 2.9%. Every province saw an increase, except for Alberta, where earnings are now down 1.1% y/y.

  • Canada's real gross GDP for its natural resources sector contracted 1.9% in the first quarter of this year, the second consecutive quarterly decline, and the largest drop since Q2/2016. The energy patch shrank 1.7%, blamed in part on Alberta's curtailment program.

Today's currency and equity market action:

  • US bond yields moved lower again on Thursday, with US 10-year notes now flirting with 2.0%, erasing most gains from the Trump trade. The US dollar was unchanged, while the Canadian dollar rose 0.2%.

  • US markets were mostly positive on Thursday, with the NYSE gaining 0.4%, and the NASDAQ adding another 0.7%. The S&P 500 Large Cap Index rose 0.3% while the DJIA was unchanged. Except for energy, which declined 0.8%, all sectors ended the day higher. Foreign ADRs listed on the NYSE mostly posted losses on Thursday.

  • In Toronto, the TSX was unchanged. Energy was also the worst performing sector, falling 2.6% for the day. Large cap midstream stocks bucked the downtrend on Thursday.

Today's notable pipeline news:

  • Democrats in Michigan continue their crusade again Enbridge and its agreement with the former Republican governor to replace a section of Line 5 that runs through the Straits of Mackinac. The state's attorney general is now suing to shut the line down much sooner than originally planned, after negotiations between Enbridge and the current governor ended without a deal. Governor Whitmer, who was originally opposed to the previous governor's plan to build an underwater tunnel, now wants the tunnel built in two years, while Enbridge insists the work would take closer to four years. Line 5 has been in service for almost 60 years, transporting 540,000 bbl/day of crude and NGLs to customers in the region.

  • TC Energy launched binding open season for up to 50,000 bbl/day of incremental capacity on its existing Keystone Pipeline, which runs from Alberta to the US Gulf Coast.

  • According to Reuters, Plains All American will soon commence filling its Cactus II pipeline, in preparation for full commercial deliveries. Cactus II is designed to transport 585,000 bbl/day from the Permian basin to Corpus Christi, Texas. The pipeline is one of many expected to come into service through the end of this year, which is expected to help alleviate congestion around the Permian region.

  • Summit Midstream Partners has sanctioned its Double E Pipeline Project, which has an initial capacity of 1.35 Bcf/day, expandable to 1.85 Bcf/day. Double E will transport natural gas from the Delaware Basin to the Waha Hub in Texas. The line is expected to commence service in the third quarter of 2021.

Today's other notable energy news:

  • The Alberta Government has set an August crude production quota of 3.74 million bbl/day, up 25,000 bbl/day from the July limit. Production quotas are now up 180,000 bbl/day from January. The Alberta Petroleum Marketing Commission has also hired CIBC Capital Markets to help transfer its existing crude-by-rail contracts to the private sector.

  • Canadian Natural Resources (CNRL) closed on its $3.8 billion acquisition of Devon Energy's Canadian assets. The deal adds 128,300 bbl/day of production capacity, 879 million barrels of 2P reserves and 720 new employees.

  • Houston-based W&T Offshore has agreed to purchase several Gulf of Mexico (GoM) properties from ExxonMobil for US$200 million. The fields are located offshore Alabama, containing 74 million barrels of reserves. W&T Offshore will assume operatorship of the assets, which currently produce about 20,000 boe/day, weighted 25% liquids.

  • The Greek government awarded licences to ExxonMobil and Total for exploration off the island of Crete. This will be the first drilling program in the region, although hydrocarbon reserves have been found in adjacent waters offshore Cyprus and Israel. The licences are valid for two blocks over the next eight years. 

OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$66.55▲0.150.47
 
86.29
WTI$59.43▲0.142.53
 
76.41
CDN LT$54.43▲1.020.83
 
69.32
C5+$54.18▲0.137.04
 
71.40
WCS$46.43▲0.112.59
 
56.30

CRUDE OIL FUTURES CURVES
BRENT
WTI
█ JUN 27   █ JUN 20   █ JUN 13   █ JUN 6   (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
Enbridge (ENB +1.2%)
Keyera (KEY +1%)
Pason Systems (PSI +0.8%)
Altagas (ALA +0.6%)
Parkland Fuel (PKI +0.3%)
12-MO
HIGHS
None
TSX BEARISH INDICATORS
BOTTOM
5
Kelt Exploration (KEL -7.2%)
ARC Resources (ARX -6.2%)
Tourmaline (TOU -5%)
Peyto Exploration (PEY -4.2%)
Birchcliff Energy (BIR -4%)
12-MO
LOWS
ARC Resources (ARX -6.2%)
Gran Tierra (GTE -1%)
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Suncor EnergySU40.73▼-1.735.53
 
55.47D   W
Imperial OilIMO35.87▼-2.133.52
 
44.91D   W
Husky EnergyHSE12.52▼-2.912.27
 
22.99D   W
MIDSTREAM
EnbridgeENB46.58▲1.239.40
 
51.22D   W
TC EnergyTRP64.26▲0.247.90
 
66.93D   W
Pembina PipelinePPL47.99▲0.039.15
 
50.65D   W
Inter PipelineIPL20.12▼-0.118.60
 
25.66D   W
Keyera KEY33.34▲1.024.05
 
38.91D   W
Gibson EnergyGEI22.97▼-0.516.90
 
24.18D   W
LARGE CAP E&P
Cdn Natural ResCNQ35.16▼-3.830.11
 
49.08D   W
Cenovus EnergyCVE11.59▼-1.68.74
 
14.84D   W
EncanaECA6.54▼-1.46.12
 
18.54D   W
TourmalineTOU16.69▼-5.015.39
 
25.79D   W
Vermilion EnergyVET28.29▼-2.626.54
 
49.67D   W
SERVICES
Pason SystemsPSI18.72▲0.817.18
 
24.57D   W
EnerflexEFX17.04▼-0.113.56
 
20.38D   W
Mullen Group MTL9.65▼-1.69.36
 
16.93D   W
ShawcorSCL18.22▼-0.115.11
 
28.89D   W
Secure EnergySES7.09▼-2.46.25
 
9.44D   W
REFINING & MARKETING
Parkland FuelPKI41.52▲0.331.59
 
47.45D   W
S&P 500 ENERGY STOCKS
SPX BULLISH INDICATORS
TOP 5
HollyFrontier (HFC +1.9%)
Cimarex Energy (XEC +1%)
TechnipFMC (FTI +0.4%)
Marathon Petro (MPC +0.3%)
Diamondback (FANG +0.2%)
12-MO
HIGHS
None
SPX BEARISH INDICATORS
BOTTOM
5
ConocoPhillips (COP -2.4%)
Halliburton (HAL -2%)
Hess Corp (HES -1.7%)
Devon Energy (DVN -1.5%)
Apache (APA -1.3%)
12-MO
LOWS
None
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Exxon MobilXOM75.82▼-1.064.65
 
87.36D   W
ChevronCVX123.11▼-0.7100.22
 
128.55D   W
MIDSTREAM
Kinder MorganKMI20.41▼-1.114.62
 
21.50D   W
Williams CoWMB27.54▲0.220.36
 
32.22D   W
ONEOKOKE67.40▲0.150.26
 
71.99D   W
LARGE CAP E&P
ConocoPhillipsCOP61.27▼-2.456.75
 
80.24D   W
EOG ResourcesEOG92.11▼-1.180.41
 
133.53D   W
Occidental PetroOXY49.75▼-1.347.00
 
86.60D   W
Anadarko PetroAPC70.53▲0.040.40
 
76.70D   W
Pioneer Natural ResPXD150.81▼-0.3119.08
 
195.00D   W
SERVICES
SchlumbergerSLB39.11▲0.234.46
 
69.61D   W
HalliburtonHAL22.73▼-2.020.98
 
47.03D   W
Baker HughesBHGE24.69▼-0.220.09
 
35.55D   W
Ntl-Oilwell VarcoNOV21.43▼-0.719.57
 
49.08D   W
TechnipFMCFTI25.34▲0.418.20
 
33.60D   W
REFINERS
Marathon PetroMPC54.37▲0.345.47
 
88.45D   W
Phillips 66PSX91.75▼-1.178.44
 
123.97D   W
Valero EnergyVLO83.93▼-1.268.81
 
122.42D   W
HollyFrontierHFC45.24▲1.937.73
 
76.56D   W
NYSE ADRs
COMPANY TICKER CLOSE %CHG L 52WK H CHART
Royal Dutch ShellRDS.A65.09▼-1.455.04
 
71.85D   W
TotalTOT55.60▼-0.949.70
 
65.69D   W
BPBP41.62▼-1.136.28
 
47.25D   W
EniE32.76▼-0.429.75
 
39.16D   W
EquinorEQNR19.78▼-1.518.91
 
28.93D   W
ANALYST RATINGS

UPGRADES

  • None.

DOWNGRADES

  • Crew Energy (CR.TO): Downgraded from Sector Outperform to Sector Perform at Scotiabank.

  • Pioneer Energy Services (PES): Downgraded from Overweight to Neutral at Piper Jaffray.

  • Patterson-UTI Energy (PTEN): Downgraded from Outperform to Market Perform at Wells Fargo.

  • Select Energy Services (WTTR): Downgraded from Outperform to Market Perform at Wells Fargo.

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
Oil prices post a loss on Friday, but end the month much improved

Oil prices post a loss on Friday, but end the month much improved

Gasoline prices spike higher after largest refinery on East Coast announces plans to shutdown

Gasoline prices spike higher after largest refinery on East Coast announces plans to shutdown