TSX energy stocks slide to new 2019 low, despite rebound in oil prices

TSX energy stocks slide to new 2019 low, despite rebound in oil prices

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Today's energy market update:

  • After yesterday's decline, oil prices rebounded slightly on Thursday.  Brent, WTI and Western Canadian Select (WCS) all rose 0.3%.

  • Canadian Light and Edmonton Condensate (C5+) rose 0.6% and 0.7%, respectively, as their differentials to WTI narrowed slightly. 

  • Gasoline and Henry Hub also moved up over 1% for the day.

Today's currency and equity market action:

  • The European Central Bank (ECB) surprised markets by keeping interest rates unchanged on Wednesday, but promised to keep rates at record lows “or lower” at least through the middle of next year. After pairing back its bond-buying program last year, the central bank is now considering a restart of the purchases. The US Federal Reserve meets next week, with almost all analysts expecting a 25 point rate cut.

  • The Japanese yen and Swiss franc both took a tumble on Thursday, falling over 0.5%, while the Euro was unchanged. The US dollar rose 0.1%, while the loonie fell 0.1%. 

  • Equity markets retreated on Thursday, with most exchanges giving back Wednesday's gains. In New York, the NASDAQ fell 1% while the NYSE declined 0.5%. The S&P 500 also fell 0.5%, with declines seen across all sectors. Energy was the worst performing sector, falling 1.2%,

  • In Toronto, the TSX fell 0.7%, dragged lower by energy stocks, which pulled back 2.9%. Energy was also the worst performing sector in Canada, breaking down to a new low for the year.

Today's notable energy news:

  • Husky Energy reported a drop in production for the second quarter, blamed on a heavy maintenance turnaround schedule and Alberta's curtailment quotas. Upstream output dropped to 268,400 boe/day, down 9% y/y. Refinery throughput declined to 340,000 bbl/day, down 4% y/y due to maintenance at its Lloydminster and Toledo refineries. Husky is sticking to its 2019 guidance of $3.3 to $3.5 billion in capital spending, at an average production rate of about 300,000 boe/day. The company is still pondering the sale of its Prince George Refinery and retail gas stations.

  • Cenovus Energy produced about 345,000 bbl/day of crude out of its oil sands operations in the second quarter, down 11% y/y due to Alberta's curtailment quotas and maintenance work at Christina Lake. Production is expected to average between 350,000 and 370,000 bbl/day for the full year. Cenovus shipped 36,000 bbl/day of crude by rail to the US Gulf Coast in June, and is on track to reach 100,000 bbl/day by the end of this year. By the end of Q2, the company says it cut its debt load to $7.1 billion, and continues to work towards its target of $5 billion.

  • Valero Energy reported a big drop in refining income, falling to US$1.0 billion in the second quarter, down from US$1.4 billion for the same quarter last year. The decline was blamed on a smaller differential between Brent and medium/heavy sour crudes. The company processed a record 190,000 bbl/day of Canadian heavy crude in Q2, and says it saw an improvement in gasoline crack spreads last quarter. Refinery throughput averaged 3.0 million bbl/day in Q2, up 70,000 bbl/day from the same time last year.

  • Encana paused its drilling operations in northwestern Oklahoma after two quakes shook the region on Wednesday. The company is meeting with state regulators this week to discuss a path forward.

  • According to S&P Global Platts, US gas consumption hit a record 44.5 Bcf/day on July 19, surpassing the old record of 43.1 Bcf/day reached in July 2018. Low gas prices, structural changes to the power grid and above normal temperatures throughout the Midwest, Northwest and Rocky Mountains contributed to the increase.

  • Total announced plans to divest US$5 billion of assets, specifically targeting upstream properties with "high breakeven," such as the North Sea. The company produced 2.96 million boe/day in the second quarter, up 9% y/y, due mostly to higher gas production. Refinery throughput fell to 1.6 million bbl/day in Q2, down 267,000 bbl/day from the previous quarter, due to the shutdown of a French refinery and Russia's contaminated crude crisis.

  • Norwegian oil major Equinor produced 2.0 million boe/day in the second quarter, roughly unchanged from the same time last year. Production from new fields offset natural declines in more mature basins. Averaged out over 2019, production is expected to remain roughly unchanged from the previous year.

OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$63.39▲0.350.47
 
86.29
WTI$56.02▲0.342.53
 
76.41
SCO$58.02▲0.225.15
 
71.86
C5+$52.77▲0.737.04
 
69.63
CDN LT$53.22▲0.620.83
 
66.02
WCS$41.82▲0.312.59
 
56.30

CRUDE OIL FUTURES CURVES
BRENT
WTI
█ JUL 25   █ JUL 18   █ JUL 11   █ JUL 4   (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
Mullen Group (MTL +8.6%)
Ensign Energy Svcs (ESI +2.4%)
Shawcor (SCL +0.5%)
Nuvista Energy (NVA +0.4%)
TC Energy (TRP +0.2%)
12-MO
HIGHS
None
TSX BEARISH INDICATORS
BOTTOM
5
Husky Energy (HSE -6.1%)
Encana (ECA -5.6%)
Enerplus (ERF -5.4%)
Gran Tierra (GTE -4.2%)
Enbridge (ENB -4%)
12-MO
LOWS
Husky Energy (HSE -6.1%)
Vermilion Energy (VET -2.7%)
Enerplus (ERF -5.4%)
Nuvista Energy (NVA +0.4%)
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Suncor EnergySU39.03▼-2.735.53
 
55.47D   W
Imperial OilIMO36.11▼-3.433.52
 
44.69D   W
Husky EnergyHSE10.72▼-6.110.61
 
22.99D   W
MIDSTREAM
EnbridgeENB44.17▼-4.039.40
 
51.22D   W
TC EnergyTRP65.36▲0.247.90
 
67.15D   W
Pembina PipelinePPL48.92▼-1.139.15
 
50.65D   W
Inter PipelineIPL22.50▼-0.218.60
 
25.35D   W
Keyera KEY34.74▼0.024.05
 
38.91D   W
Gibson EnergyGEI23.67▼-0.916.90
 
24.43D   W
LARGE CAP E&P
Cdn Natural ResCNQ32.90▼-3.030.11
 
47.93D   W
Cenovus EnergyCVE12.07▼-1.88.74
 
14.26D   W
EncanaECA5.78▼-5.65.63
 
18.54D   W
TourmalineTOU16.75▼-3.015.39
 
25.79D   W
Vermilion EnergyVET25.19▼-2.725.06
 
47.98D   W
SERVICES
Pason SystemsPSI18.02▼-0.517.18
 
24.57D   W
EnerflexEFX16.70▼-0.914.36
 
20.38D   W
Mullen Group MTL10.02▲8.69.15
 
16.93D   W
ShawcorSCL17.09▲0.515.11
 
28.89D   W
Secure EnergySES6.79▼-0.46.25
 
9.44D   W
REFINING & MARKETING
Parkland FuelPKI43.83▼-0.131.59
 
47.45D   W
S&P 500 ENERGY STOCKS
SPX BULLISH INDICATORS
TOP 5
TechnipFMC (FTI +6.1%)
ONEOK (OKE +0.2%)
12-MO
HIGHS
None
SPX BEARISH INDICATORS
BOTTOM
5
Cimarex Energy (XEC -4.2%)
Concho Res (CXO -3.9%)
Helmerich & Payne (HP -3.7%)
Devon Energy (DVN -3.5%)
Valero Energy (VLO -3.1%)
12-MO
LOWS
Cimarex Energy (XEC -4.2%)
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Exxon MobilXOM74.93▼-0.664.65
 
87.36D   W
ChevronCVX125.63▼-0.7100.22
 
128.55D   W
MIDSTREAM
Kinder MorganKMI20.58▼-0.314.62
 
21.50D   W
Williams CoWMB26.32▼-2.220.36
 
32.22D   W
ONEOKOKE68.57▲0.250.26
 
71.43D   W
LARGE CAP E&P
ConocoPhillipsCOP59.04▼-1.756.75
 
80.24D   W
EOG ResourcesEOG85.47▼-2.580.41
 
133.53D   W
Occidental PetroOXY51.14▼-1.847.00
 
84.93D   W
Anadarko PetroAPC73.47▼-0.240.40
 
76.23D   W
Pioneer Natural ResPXD135.91▼-2.7119.08
 
193.03D   W
SERVICES
SchlumbergerSLB39.95▼-0.934.46
 
68.30D   W
HalliburtonHAL23.22▼-2.420.98
 
42.89D   W
Baker HughesBHGE24.62▼-0.920.09
 
35.55D   W
Ntl-Oilwell VarcoNOV21.45▼-2.619.57
 
49.08D   W
TechnipFMCFTI27.98▲6.118.20
 
33.60D   W
REFINERS
Marathon PetroMPC56.50▼-1.945.47
 
88.45D   W
Phillips 66PSX101.57▼-0.878.44
 
123.97D   W
Valero EnergyVLO83.45▼-3.168.81
 
122.42D   W
HollyFrontierHFC49.32▼-0.337.73
 
76.56D   W
NYSE ADRs
COMPANY TICKER CLOSE %CHG L 52WK H CHART
Royal Dutch ShellRDS.A62.87▼-0.555.04
 
70.47D   W
TotalTOT53.29▼-0.949.70
 
65.69D   W
BPBP38.99▼-0.436.28
 
47.16D   W
EniE31.90▲0.129.75
 
39.16D   W
EquinorEQNR18.15▼-4.318.06
 
28.93D   W
ANALYST RATINGS

UPGRADES

  • None.

DOWNGRADES

  • RPC (RES): Downgraded from Buy to Hold at Gabelli.

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

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