Enbridge meltdown sinks TSX and Canadian energy sector

Enbridge meltdown sinks TSX and Canadian energy sector

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Today's energy market action:

  • After initially moving higher earlier in the day, energy markets all fizzled by the afternoon, sending the US and global crude benchmarks lower for a fourth consecutive day.

  • Brent declined 5% for the day, due mostly to last Friday's expiry of the July contract last Friday. Brent futures are in steep backwardation, which sees future months trade at lower prices. WTI fell a more modest 0.5%.

  • WCS rose 4.4%, as the heavy oil discount narrowed by almost US$2 to US$13.20/bbl. The narrowing is being blamed on CNRL's evacuation of two facilities in the Slave Lake region due to encroaching wildfires, taking 65,000 bbl/day of crude production offline.

  • Canadian Light rose 0.6%, while Edmonton condensate was unchanged for the day.

  • Heating oil, gasoline and Henry Hub natural gas prices also ended the day about 2% lower.

  • According to Reuters, OPEC members produced 30.17 million bbl/day of crude in May, down 60,000 bbl/day from April, and the lowest since 2015. Russia's output averaged 11.11 million bbl/day last month, down 120,000 bbl/day from the previous month, and the lowest since June 2018.

Today's currency, treasury and equity market update:

  • US bond yields tumbled again on Monday, particularly on the short end of the curve. The US dollar lost 0.5% for the day, giving a boost to most other foreign currencies.

  • Except for mega-cap FANG stocks, US equity markets recovered slightly on the first trading day of the week. The NYSE rose 0.6% while the S&P 500 lost 0.3%. The Dow Jones Industrial Average was little changed, while the NASDAQ sank 1.6%. The SPX energy sector rose 1.4%, its first gain in the past five trading days.

  • The TSX dipped 0.1% for the day. Canada's energy sector lost 1.4% on Tuesday, blamed mostly on a sharp decline in Enbridge shares.

Today's notable energy news:

  • A Minnesota court has overturned the state's approval of Enbridge's Line 3 Replacement Project (L3RP), calling its environmental impact assessment inadequate. Enbridge says it is disappointed with the ruling, and will work with state regulators to determine the next steps.

  • BP has agreed to sell its mature oil assets in Egypt to Dragon Oil, wholly-owned subsidiary of the Emirates National Oil Company. The divestiture includes BP’s interest in the Gulf of Suez Petroleum Company. Financial terms of the deal were not disclosed, although sources at Reuters estimate the selling price to be over US$600 million.

  • Total has agreed to buy Toshiba's US LNG business, which includes a 20-year tolling agreement for 2.2 million t/y of LNG from Freeport LNG in Texas, which is expected to start commercial operations by next summer. Under terms of the deal, Total will pay US$15 million for Toshiba America LNG but receive US$815 million in cash for all contract assignments related to the business.

  • Kinder Morgan received a positive environmental assessment from FERC on its proposed Lockridge Extension Pipeline, which would add natural gas transportation capacity from Waha, Texas into the Trans-Pecos Pipeline, which connects into Mexico. The company was also forced to evacuate its Carson storage terminal in California after an explosion which injured four people.

  • Murphy Oil closed on its previously announced US$1.23 billion acquisition of various deepwater assets in the Gulf of Mexico, which is expected to add up to 35,000 boe/day of output to the company's total production.

OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$61.28▼5.050.47
 
86.29
WTI$53.25▼0.542.53
 
76.41
CDN LT$46.26▲0.620.83
 
69.32
C5+$47.500.037.04
 
71.40
WCS$40.06▲4.412.59
 
56.30

CRUDE OIL FUTURES CURVES
BRENT
WTI
█ JUN 3   █ MAY 27   █ MAY 20   █ MAY 13   (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
Gran Tierra (GTE +2.3%)
Mullen Group (MTL +1.5%)
Enerflex (EFX +1.3%)
Precision Drilling (PD +1.2%)
Parkland Fuel (PKI +0.6%)
12-MO
HIGHS
None
TSX BEARISH INDICATORS
BOTTOM
5
Enbridge (ENB -4.7%)
Birchcliff Energy (BIR -2.2%)
TORC O&G (TOG -2.2%)
Cenovus Energy (CVE -2.1%)
Cdn Natural Res (CNQ -2%)
12-MO
LOWS
ARC Resources (ARX -1.1%)
CES Energy (CEU -0.5%)
Enerplus (ERF -1.5%)
Peyto Exploration (PEY -1.7%)
Seven Generations (VII -1%)
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Suncor EnergySU40.69▼-1.335.53
 
55.47D   W
Imperial OilIMO35.96▼-0.533.52
 
44.91D   W
Husky EnergyHSE12.64▼-0.412.31
 
22.99D   W
MIDSTREAM
EnbridgeENB47.42▼-4.739.40
 
51.22D   W
TC EnergyTRP65.35▼-0.847.90
 
66.93D   W
Pembina PipelinePPL48.18▼-0.139.15
 
50.65D   W
Inter PipelineIPL20.70▲0.518.60
 
25.66D   W
Keyera KEY32.39▼-0.524.05
 
38.91D   W
Gibson EnergyGEI22.10▲0.216.90
 
23.75D   W
LARGE CAP E&P
Cdn Natural ResCNQ35.77▼-2.030.11
 
49.08D   W
Cenovus EnergyCVE10.85▼-2.18.74
 
14.84D   W
EncanaECA7.17▲0.66.90
 
18.54D   W
TourmalineTOU17.24▲0.215.84
 
26.11D   W
Vermilion EnergyVET28.44▲0.426.67
 
49.67D   W
SERVICES
Pason SystemsPSI19.29▼-0.217.18
 
24.57D   W
EnerflexEFX16.59▲1.313.55
 
20.38D   W
Mullen Group MTL9.90▲1.59.39
 
16.93D   W
ShawcorSCL17.38▲0.315.11
 
28.89D   W
Secure EnergySES6.94▼-0.76.25
 
9.44D   W
REFINING & MARKETING
Parkland FuelPKI41.75▲0.631.16
 
47.45D   W
S&P 500 ENERGY STOCKS
SPX BULLISH INDICATORS
TOP 5
Apache (APA +3.2%)
Marathon Petro (MPC +2.5%)
Schlumberger (SLB +2.3%)
Valero Energy (VLO +2.3%)
Baker Hughes (BHGE +2%)
12-MO
HIGHS
None
SPX BEARISH INDICATORS
BOTTOM
5
Hess Corp (HES -2.1%)
Occidental Petro (OXY -0.9%)
Anadarko Petro (APC -0.5%)
12-MO
LOWS
EOG Resources (EOG +1.3%)
Occidental Petro (OXY -0.9%)
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Exxon MobilXOM71.88▲1.664.65
 
87.36D   W
ChevronCVX115.99▲1.9100.22
 
128.55D   W
MIDSTREAM
Kinder MorganKMI20.14▲1.014.62
 
20.57D   W
Williams CoWMB26.87▲1.920.36
 
32.22D   W
ONEOKOKE63.78▲0.350.26
 
71.99D   W
LARGE CAP E&P
ConocoPhillipsCOP59.42▲0.856.75
 
80.24D   W
EOG ResourcesEOG82.95▲1.381.32
 
133.53D   W
Occidental PetroOXY49.32▼-0.949.05
 
87.67D   W
Anadarko PetroAPC70.03▼-0.540.40
 
76.70D   W
Pioneer Natural ResPXD142.61▲0.5119.08
 
197.42D   W
SERVICES
SchlumbergerSLB35.49▲2.334.46
 
70.47D   W
HalliburtonHAL21.60▲1.521.14
 
50.12D   W
Baker HughesBHGE21.84▲2.020.09
 
35.68D   W
Ntl-Oilwell VarcoNOV21.22▲1.820.38
 
49.08D   W
TechnipFMCFTI21.08▲1.418.20
 
33.60D   W
REFINERS
Marathon PetroMPC47.13▲2.545.47
 
88.45D   W
Phillips 66PSX82.20▲1.778.44
 
123.97D   W
Valero EnergyVLO72.00▲2.368.81
 
126.98D   W
HollyFrontierHFC38.66▲1.837.73
 
83.28D   W
NYSE ADRs
COMPANY TICKER CLOSE %CHG L 52WK H CHART
Royal Dutch ShellRDS.A62.38▲0.955.04
 
71.85D   W
TotalTOT52.28▲1.549.70
 
65.69D   W
BPBP41.04▲0.836.28
 
47.57D   W
EniE30.88▲3.129.75
 
39.16D   W
EquinorEQNR19.57▲2.218.91
 
28.93D   W
ANALYST RATINGS

UPGRADES

  • Targa Resources (TRGP): Upgraded from Hold to Buy at SunTrust Banks.

DOWNGRADES

  • PetroChina (PTR): Downgraded from Neutral to Underperform at Credit Suisse.

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
• CHARTPACKS COURTESY STOCKCHARTS.COM (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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