Oil prices move up sharply, as production comes offline in the Gulf of Mexico
Today's energy market update:
Production outages in the Gulf of Mexico and much bigger than expected drawdown in US crude stockpiles helped give oil prices a lift on Wednesday.
Brent, WTI, Canadian Light all gained about 4.5%, while WCS rose almost 6%. Discounts to WTI narrowed slightly.
Gasoline and heating oil prices also rose over 4% on Wednesday.
Producers in the US Gulf of Mexico began evacuating platforms and shutting in production on Wednesday, ahead of a tropical storm which is expected to roll through on Thursday. ExxonMobil, BP, Royal Dutch Shell and Anadarko have begun evacuating non-essential staff, taking over 600,000 bbl/day of crude and 500 MMcf/day of natural gas offline. The storm is expected to reach hurricane status by the weekend, bringing heavy rains and flooding into southeastern Louisiana.
The Energy Information Administration reported a 9.5 million barrel drop in crude stockpiles south of the border, mostly seen in the Gulf Coast. Production ticked up slightly to 12.3 million bbl/day, while US imports of Canadian crude surged to almost 4 million bbl/day.
Today's currency and equity market action:
According to minutes from the June FOMC meeting, US policy makers are poised to reverse course and begin cutting interest rates, citing a weakening economic outlook, tepid inflation and worries over global trade. The news steepened the yield curve, sending the US dollar lower by 0.4%.
The Bank of Canada (BoC) held interest rates unchanged on Wednesday, despite data that points to an improving economy. The BoC expects GDP to expand at 2.3% in the second quarter, due in part to a major recovery in oil production, bringing full-year 2019 expansion to a feeble 1.3%. The loonie rose 0.4% for the day.
Markets in Toronto and New York posted modest gains on Wednesday. The NYSE rose 0.3%, while the NASDAQ gained 0.8%. The TSX eked out a 0.1% increase.
Energy was the best performing sector on both sides of the border, rising 1.4% on the SPX and 2.2% on the TSX.
Today's other notable energy news:
Enbridge has reduced minimum volume commitments on its Mainline from 6,000 bbl/day to just 2,200 bbl/day, in a bid to appease smaller producers. The company plans to commence open season in July, moving away from its current practice of monthly nominations. The new plan would take effect in 2021, with terms varying from 8 to 20 years.
The Dominican Republic is the latest country looking to get into the oil business, holding its first licensing round this week. The blocks being auctioned are both onshore and offshore, and have attracted interest from several international oil majors.
Total announced the divestiture of several non-core UK gas assets to Petrogas for US$635 million. The properties are located in the Eastern North Sea and were acquired during its purchase of Maersk Oil.
|Suncor Energy||SU||42.40||▲0.6||35.53||55.47||D W|
|Imperial Oil||IMO||36.82||▲0.1||33.52||44.91||D W|
|Husky Energy||HSE||12.64||▲1.4||12.18||22.99||D W|
|TC Energy||TRP||66.61||▲1.5||47.90||66.93||D W|
|Pembina Pipeline||PPL||49.96||▲0.8||39.15||50.65||D W|
|Inter Pipeline||IPL||22.20||▲0.4||18.60||25.66||D W|
|Gibson Energy||GEI||23.92||▲0.6||16.90||24.18||D W|
|LARGE CAP E&P|
|Cdn Natural Res||CNQ||36.15||▲2.7||30.11||49.08||D W|
|Cenovus Energy||CVE||12.26||▲2.5||8.74||14.84||D W|
|Vermilion Energy||VET||28.63||▲0.8||26.54||49.67||D W|
|Pason Systems||PSI||18.34||▲0.3||17.18||24.57||D W|
|Mullen Group||MTL||9.53||▲0.5||9.36||16.93||D W|
|Secure Energy||SES||7.33||▲3.2||6.25||9.44||D W|
|REFINING & MARKETING|
|Parkland Fuel||PKI||43.31||▲3.2||31.59||47.45||D W|
|Exxon Mobil||XOM||77.51||▲1.4||64.65||87.36||D W|
|Kinder Morgan||KMI||21.18||▼-0.3||14.62||21.50||D W|
|Williams Co||WMB||28.82||▲0.3||20.36||32.22||D W|
|LARGE CAP E&P|
|EOG Resources||EOG||90.66||▲1.7||80.41||133.53||D W|
|Occidental Petro||OXY||50.24||▲1.3||47.00||86.60||D W|
|Anadarko Petro||APC||71.16||▲0.2||40.40||76.70||D W|
|Pioneer Natural Res||PXD||146.60||▲2.3||119.08||193.03||D W|
|Baker Hughes||BHGE||25.38||▲1.5||20.09||35.55||D W|
|Ntl-Oilwell Varco||NOV||22.09||▲2.7||19.57||49.08||D W|
|Marathon Petro||MPC||54.98||▲0.6||45.47||88.45||D W|
|Phillips 66||PSX||98.11||▲0.4||78.44||123.97||D W|
|Valero Energy||VLO||83.40||▲1.4||68.81||122.42||D W|
Core Laboratories (CLB): Upgraded from Neutral to Buy at BofA.
Total (TOT): Upgraded from Neutral to Outperform at Credit Suisse.
BP (BP): Downgraded from Outperform to Neutral at Credit Suisse.
FTS International (FTSI): Downgraded from Buy to Neutral at BofA.
Superior Energy Services (SPN): Downgraded from Positive to Neutral at Susquehanna Bancshares.
UPDATED: DAILY (END-OF-DAY)
• 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
• OIL PRICES, FUTURES AND DIFFERENTIALS SHOWN IN USD/BBL
• WCS = WESTERN CANADIAN SELECT; C5+ = EDMONTON CONDENSATE; SCO = SYNTHETIC CRUDE
• FUTURES CURVES REFLECT 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