Oil prices move lower on Wednesday, despite bullish US inventory report

Oil prices move lower on Wednesday, despite bullish US inventory report

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Today's energy and equity market update:

  • Oil prices posted their first loss for the week, despite a massive drop in US crude output and stockpiles.

  • Brent declined 1% while WTI fell 1.6%. Canadian Light dropped 0.8%, as its discount to WTI narrowed by another US$0.45 to US$3 a barrel. WCS fell 2%, as its differential to WTI was unchanged.

  • Heating oil and gasoline also moved lower for the day. Henry Hub also fell 3.5%.

  • Currencies were little changed for the day, including the US and Canadian dollar.

  • Equity markets moved higher on both sides of the border. The NYSE posted a 0.3% gain, while the TSX moved up 0.2%. The S&P 500 Large Cap Index rose 0.5%, helped by the more offensive sectors.

  • SPX energy rose 0.4%, with all subsectors moving higher except for midstream names. TSX energy stocks slumped 1.2%, with all subsectors posting losses for the day.

Today's notable energy news:

  • According to the Energy Information Administration, total US output was about 1 million bbl/day below normal last week, due to outages brought on by Hurricane Barry. Crude stockpiles declined by almost 11 million barrels. Imports of Canadian crude remain robust at 3.7 million bbl/day, helped by a near-perfect utilization rate among refineries in the Midwest.

  • Suncor Energy reported record second quarter production, despite the province's curtailment program. Total upstream output averaged 803,900 boe/day, helped by ramp-up of Hebron and Fort Hills, improved reliability at Syncrude and less maintenance activity. The company's Oil Sands division produced 414,200 bbl/day at an average operating cost of $27.80 a barrel. Suncor also cut the upper end of its 2019 capital expenditures budget from $5.6 to $5.4 billion. So far this year, operating earnings totalled $2.5 billion, 13% higher than the same period last year.

  • Suncor also reported much improved results at Syncrude, where Q2 production averaged over 320,000 bbl/day, at an average operating cost of $34.90 per barrel of Synthetic Crude (SCO). Guidance on Syncrude's operating costs was bumped up by about $3/bbl, to between $36.50  and $39.50, due to continued reliability improvements at the facility. Suncor owns about 59% of the Syncrude project.

  • Shipments of petroleum and chemicals at CN Rail rose to 174,000 carloads in the second quarter, up from 168,000 in the previous quarter. Crude-by-rail shipments averaged almost 200,000 bbl/day in June, up from a low of just 86,000 bbl/day in February. The company says it expects to see continued growth in shipments of crude, refined petroleum products and natural gas liquids. Overall, CN posted a record $4 billion in revenues for the second quarter of this year.

  • Obsidian Energy has regained compliance for its US listing on the NYSE, now that its stock has traded above US$1 a share for 30 consecutive days. OBE stock moved up to US$1.70 after a 7-for-1 stock consolidation on June 10th, but sank to US$1.01 at  Wednesday's close.

  • S&P Global Ratings raised Gibson Energy's long-term issuer credit rating and senior unsecured debt rating from "BBB (low)" to "BBB–" with a “Stable” outlook. CEO Sean Brown says the investment grade rating reflects  the company's "transformation into a leading oil-focused infrastructure growth company."

  • ExxonMobil announced the start of production of a new polyethylene line at its Beaumont complex in Texas. The expansion boosts production capacity by 65%, bringing total capacity to 1.7 million t/yr. Exxon is now the largest polyethylene producer in Texas.

  • Schlumberger announced a 20-year Services Master Contract from Chevron for its Gulf of Mexico subsea developments. Financial terms of the deal were not disclosed.

  • Kuwait Integrated Petroleum Industries Company (KIPIC) awarded a contract for reconfiguration of its Al-Zour refinery to Honeywell's UOP division. The redesign will increase the plant's capacity of refined fuels and petrochemicals. Financial terms of the deal were not disclosed.

OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$63.18▼1.050.47
 
86.29
WTI$55.88▼1.642.53
 
76.41
SCO$57.88▼1.525.15
 
71.86
C5+$52.38▼0.337.04
 
69.63
CDN LT$52.88▼0.820.83
 
66.02
WCS$41.68▼2.012.59
 
56.30

CRUDE OIL FUTURES CURVES
BRENT
WTI
█ JUL 24   █ JUL 17   █ JUL 10   █ JUL 3   (USD/BBL)
MARKET OVERVIEW
MARKETS
CURRENCIES & YIELDS
     TSX SECTORS
52WK Δ
     SPX SECTORS
52WK Δ
ENERGY SECTORS

TSX ENERGY SUB-SECTORS

SPX ENERGY SUB-SECTORS
TSX ENERGY STOCKS
TSX BULLISH INDICATORS
TOP 5
Altagas (ALA +1.4%)
Parkland Fuel (PKI +0.6%)
Husky Energy (HSE +0.6%)
Imperial Oil (IMO +0.6%)
Enerplus (ERF +0.6%)
12-MO
HIGHS
None
TSX BEARISH INDICATORS
BOTTOM
5
Birchcliff Energy (BIR -3.1%)
Cenovus Energy (CVE -3%)
Secure Energy (SES -2.4%)
Shawcor (SCL -2.3%)
MEG Energy (MEG -2.2%)
12-MO
LOWS
None
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Suncor EnergySU40.10▼-1.635.53
 
55.47D   W
Imperial OilIMO37.36▲0.633.52
 
44.69D   W
Husky EnergyHSE11.42▲0.611.05
 
22.99D   W
MIDSTREAM
EnbridgeENB46.01▼-1.139.40
 
51.22D   W
TC EnergyTRP65.26▼-1.447.90
 
67.15D   W
Pembina PipelinePPL49.45▼-0.439.15
 
50.65D   W
Inter PipelineIPL22.54▼-0.618.60
 
25.35D   W
Keyera KEY34.75▼-0.524.05
 
38.91D   W
Gibson EnergyGEI23.89▼-0.916.90
 
24.43D   W
LARGE CAP E&P
Cdn Natural ResCNQ33.92▼-1.430.11
 
47.93D   W
Cenovus EnergyCVE12.29▼-3.08.74
 
14.26D   W
EncanaECA6.12▲0.25.63
 
18.54D   W
TourmalineTOU17.26▼-0.915.39
 
25.79D   W
Vermilion EnergyVET25.88▼-1.425.70
 
47.98D   W
SERVICES
Pason SystemsPSI18.11▲0.117.18
 
24.57D   W
EnerflexEFX16.85▼-1.414.17
 
20.38D   W
Mullen Group MTL9.23▼-2.09.15
 
16.93D   W
ShawcorSCL17.00▼-2.315.11
 
28.89D   W
Secure EnergySES6.82▼-2.46.25
 
9.44D   W
REFINING & MARKETING
Parkland FuelPKI43.89▲0.631.59
 
47.45D   W
S&P 500 ENERGY STOCKS
SPX BULLISH INDICATORS
TOP 5
Marathon Petro (MPC +3.4%)
HollyFrontier (HFC +2.4%)
Baker Hughes (BHGE +2.3%)
Apache (APA +2%)
Valero Energy (VLO +1.7%)
12-MO
HIGHS
None
SPX BEARISH INDICATORS
BOTTOM
5
Williams Co (WMB -1.5%)
Cabot O&G (COG -0.7%)
ConocoPhillips (COP -0.3%)
Pioneer Natural Res (PXD -0.2%)
Halliburton (HAL -0.2%)
12-MO
LOWS
None
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Exxon MobilXOM75.36▼0.064.65
 
87.36D   W
ChevronCVX126.54▲0.6100.22
 
128.55D   W
MIDSTREAM
Kinder MorganKMI20.65▲0.314.62
 
21.50D   W
Williams CoWMB26.90▼-1.520.36
 
32.22D   W
ONEOKOKE68.43▼-0.150.26
 
71.43D   W
LARGE CAP E&P
ConocoPhillipsCOP60.08▼-0.356.75
 
80.24D   W
EOG ResourcesEOG87.68▲0.180.41
 
133.53D   W
Occidental PetroOXY52.05▲0.547.00
 
84.93D   W
Anadarko PetroAPC73.64▲0.040.40
 
76.23D   W
Pioneer Natural ResPXD139.64▼-0.2119.08
 
193.03D   W
SERVICES
SchlumbergerSLB40.33▲1.534.46
 
68.30D   W
HalliburtonHAL23.79▼-0.220.98
 
42.89D   W
Baker HughesBHGE24.86▲2.320.09
 
35.55D   W
Ntl-Oilwell VarcoNOV22.03▲0.919.57
 
49.08D   W
TechnipFMCFTI26.39▲0.918.20
 
33.60D   W
REFINERS
Marathon PetroMPC57.62▲3.445.47
 
88.45D   W
Phillips 66PSX102.42▲0.178.44
 
123.97D   W
Valero EnergyVLO86.17▲1.768.81
 
122.42D   W
HollyFrontierHFC49.51▲2.437.73
 
76.56D   W
NYSE ADRs
COMPANY TICKER CLOSE %CHG L 52WK H CHART
Royal Dutch ShellRDS.A63.17▼-1.055.04
 
70.60D   W
TotalTOT53.76▼-1.049.70
 
65.69D   W
BPBP39.14▼-0.836.28
 
47.16D   W
EniE31.85▼-0.829.75
 
39.16D   W
EquinorEQNR18.97▼-0.418.65
 
28.93D   W
ANALYST RATINGS

UPGRADES

  • None.

DOWNGRADES

  • None.

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 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
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