Energy stocks post second consecutive week of losses, despite higher oil prices

Energy stocks post second consecutive week of losses, despite higher oil prices

EDITOR’S NOTE: THE DAILY WRAP WILL NOT BE PUBLISHED OVER THE NEXT TWO WEEKS, AND WILL RETURN ON MONDAY AUGUST 12, 2019.
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Today's energy market update:

  • Oil prices perked up slightly on Friday, helped by another decline in US oil rig counts.

  • Brent eked up 0.1%, while WTI and Canadian Light moved up 0.3%.

  • Edmonton condensate moved up 0.8%, as its discount to WTI narrowed to US$3 a barrel. Western Canadian Select (WCS) rose almost 1%, as its differential narrowed to US$14.

  • For the week, Brent gained 1.6%, WTI and SCO both rose 1.0%, Canadian Light rose 2.7%, while C5+ and WCS both added about 3.5%.

  • Gasoline and heating oil were little changed for the day, but up 1.5% and 0.9%, respectively, for the week.

  • Henry Hub fell another 3.5% on Friday, bringing this week's total declines to 4.5%, and returning to the lows of May 2016.

Today's currency and equity market action:

  • The US economy grew at an annualized rate of 2.1% in the second quarter, down from 3.1% in Q1, but better than most analysts were expecting. Markets are expecting the US Federal Reserve to cut interest rates on Wednesday.

  • The US dollar moved up another 0.2% on Friday, bringing this week's total gains to 1%. All other major currencies posted losses this week, including the loonie which declined 0.8%.

  • Equity markets in New York and Toronto moved higher on Friday, helping to end the week in the positive. The NYSE rose 0.5% for the day and 0.9% for the week. The TSX  gained 0.3% for both the day and the week.

  • Energy stocks were once again the worst performing sector on Friday. On the SPX, energy declined 0.5% for the day and 0.6% for the week. On the TSX, energy stocks slid another 0.8% for the day, and 3.8% for the week, returning to the lows of last Christmas. This is the second consecutive week of declines for both the Canadian and US energy sectors.

Today's notable energy news:

  • According to Baker Hughes, US drillers took another 3 rigs out of service this week, a fourth consecutive week of declines. Canada added 2 oil rigs, bringing the total to 85.

  • The Alberta Energy Regulator and Canadian Environmental Assessment Agency recommend approval of Teck Resources' 260,000 bbl/day Frontier Oil Sands Mine, calling the project in the public interest. The report now goes to the federal environment minister, who has until February 2020 to make a final decision. Teck has yet to announce a final investment decision on the $21 billion project, but says an initial phase of 170,000 bbl/day could be operational as early as 2026.

  • Calgary-based Precision Drilling says it saw "competitive strength" in its three core markets (Canada, the US and Middle East), despite industry headwinds. The company has made $124 million in debt repayments so far this year, and boosted its 2019 debt reduction target to $200 million.

  • Crescent Point Energy also says it paid back over $450 million in debt so far this year, reducing its debt load to $3.6 billion. Second quarter production declined 5% to 172,500 boe/day due to asset sales and "disciplined capital spending."

  • Marketing, refining, chemicals and midstream player Phillips 66 reported an adjusted Q2 profit of US$1.4 billion, up 4% from the same quarter last year. PSX has a number of projects on its plate, including the Liberty Pipeline, Red Oak Pipeline, Grey Oak Pipeline, Sweeny Hub expansion and two new mega-petrochemical plants — one in the US Gulf Coast and another in Qatar.

  • Anadarko Petroleum produced 744,000 boe/day in the second quarter, weighted 58% oil, up 17% y/y. The company reported a US$1 billion loss in Q2, blamed on a US$1 billion break-up fee paid to Chevron over its failed merger talks.

  • The Trump Administration has extended Chevron's license to drill offshore Venezuela, despite ongoing sanctions. Chevron has four JVs with state-owned PDVSA dating back almost one century, producing about 200,000 bbl/day (40,000 bbl/day net to Chevron). This latest extension allows the company to continue working in the country until the end of October. Chevron says its operations in Venezuela are in "compliance with all applicable laws and regulations."

OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$63.46▲0.150.47
 
86.29
WTI$56.20▲0.342.53
 
76.41
SCO$58.20▲0.325.15
 
71.86
C5+$53.20▲0.837.04
 
69.63
CDN LT$53.40▲0.320.83
 
63.86
WCS$42.20▲0.912.59
 
56.30

CRUDE OIL FUTURES CURVES
BRENT
WTI
█ JUL 26   █ JUL 19   █ JUL 12   █ JUL 5   (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
Gran Tierra (GTE +2.4%)
Mullen Group (MTL +2.4%)
Baytex Energy (BTE +2.1%)
Cenovus Energy (CVE +0.7%)
Secure Energy (SES +0.3%)
12-MO
HIGHS
None
TSX BEARISH INDICATORS
BOTTOM
5
Peyto Exploration (PEY -4.3%)
Encana (ECA -4.2%)
Birchcliff Energy (BIR -4%)
CES Energy (CEU -3.8%)
Vermilion Energy (VET -3.6%)
12-MO
LOWS
Husky Energy (HSE -2.9%)
Encana (ECA -4.2%)
Vermilion Energy (VET -3.6%)
CES Energy (CEU -3.8%)
Enerplus (ERF -0.7%)
Nuvista Energy (NVA -0.8%)
Precision Drilling (PD -2.8%)
TORC O&G (TOG -2.3%)
Seven Generations (VII -3.2%)
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Suncor EnergySU39.01▼-0.135.53
 
55.47D   W
Imperial OilIMO35.96▼-0.433.52
 
44.69D   W
Husky EnergyHSE10.41▼-2.910.36
 
22.99D   W
MIDSTREAM
EnbridgeENB44.24▲0.239.40
 
51.22D   W
TC EnergyTRP64.50▼-1.347.90
 
67.15D   W
Pembina PipelinePPL48.41▼-1.039.15
 
50.65D   W
Inter PipelineIPL22.39▼-0.518.60
 
25.35D   W
Keyera KEY34.27▼-1.424.05
 
38.91D   W
Gibson EnergyGEI23.60▼-0.316.90
 
24.43D   W
LARGE CAP E&P
Cdn Natural ResCNQ32.85▼-0.230.11
 
47.93D   W
Cenovus EnergyCVE12.15▲0.78.74
 
14.26D   W
EncanaECA5.54▼-4.25.46
 
18.54D   W
TourmalineTOU16.22▼-3.215.39
 
25.79D   W
Vermilion EnergyVET24.29▼-3.624.27
 
47.98D   W
SERVICES
Pason SystemsPSI17.98▼-0.217.18
 
24.57D   W
EnerflexEFX16.60▼-0.614.36
 
20.38D   W
Mullen Group MTL10.26▲2.49.15
 
16.93D   W
ShawcorSCL17.13▲0.215.11
 
28.89D   W
Secure EnergySES6.81▲0.36.25
 
9.44D   W
REFINING & MARKETING
Parkland FuelPKI43.70▼-0.331.59
 
47.45D   W
S&P 500 ENERGY STOCKS
SPX BULLISH INDICATORS
TOP 5
TechnipFMC (FTI +1.9%)
Kinder Morgan (KMI +1.3%)
Ntl-Oilwell Varco (NOV +1.3%)
Valero Energy (VLO +1%)
Baker Hughes (BHGE +0.9%)
12-MO
HIGHS
None
SPX BEARISH INDICATORS
BOTTOM
5
Cabot O&G (COG -12.1%)
Williams Co (WMB -4.5%)
Helmerich & Payne (HP -1.9%)
Chevron (CVX -1.5%)
EOG Resources (EOG -1.4%)
12-MO
LOWS
Cabot O&G (COG -12.1%)
Cimarex Energy (XEC -0.4%)
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Exxon MobilXOM74.81▼-0.264.65
 
87.36D   W
ChevronCVX123.72▼-1.5100.22
 
128.55D   W
MIDSTREAM
Kinder MorganKMI20.85▲1.314.62
 
21.50D   W
Williams CoWMB25.13▼-4.520.36
 
32.22D   W
ONEOKOKE68.49▼-0.150.26
 
71.43D   W
LARGE CAP E&P
ConocoPhillipsCOP58.75▼-0.556.75
 
80.24D   W
EOG ResourcesEOG84.29▼-1.480.41
 
133.53D   W
Occidental PetroOXY51.59▲0.947.00
 
84.65D   W
Anadarko PetroAPC73.62▲0.240.40
 
76.23D   W
Pioneer Natural ResPXD135.68▼-0.2119.08
 
193.03D   W
SERVICES
SchlumbergerSLB40.01▲0.234.46
 
68.30D   W
HalliburtonHAL23.03▼-0.820.98
 
42.89D   W
Baker HughesBHGE24.84▲0.920.09
 
35.55D   W
Ntl-Oilwell VarcoNOV21.72▲1.319.57
 
49.08D   W
TechnipFMCFTI28.51▲1.918.20
 
33.60D   W
REFINERS
Marathon PetroMPC56.84▲0.645.47
 
88.45D   W
Phillips 66PSX102.32▲0.778.44
 
123.97D   W
Valero EnergyVLO84.31▲1.068.81
 
122.42D   W
HollyFrontierHFC49.60▲0.637.73
 
76.56D   W
NYSE ADRs
COMPANY TICKER CLOSE %CHG L 52WK H CHART
Royal Dutch ShellRDS.A63.02▲0.255.04
 
70.09D   W
TotalTOT53.63▲0.649.70
 
65.69D   W
BPBP38.98▼0.036.28
 
47.16D   W
EniE31.78▼-0.429.75
 
39.16D   W
EquinorEQNR18.31▲0.918.06
 
28.93D   W
ANALYST RATINGS

UPGRADES

  • Mullen Group (MTL.TO): Upgraded from Reduce to Hold at GMP Sercurities.

DOWNGRADES

  • Superior Energy Services (SPN): Downgraded from Overweight to Neutral at Piper Jaffray.

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
Energy stocks kick off the trading week with another loss

Energy stocks kick off the trading week with another loss

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