TSX energy stocks tumble another 1%, and look to retest lows of 2019
Today's energy market update:
Oil prices took a hard fall early last week, despite OPEC's decision to extend their existing production pact to March 2020. Brent dipped 0.2% on Monday, ending the day just above US$64 a barrel. WTI rose 0.3%, closing just under US$58.
Canadian benchmarks all gained ground on Monday, moving up in tandem with WTI.
Gasoline prices declined 1.5%, while Henry Hub gave back 0.6%.
Today's currency and equity market action:
Expectations for a July rate cut were tempered slightly after a much better than expected US jobs report was released on Friday. The US dollar surged over 1% last week, but was little moved on Monday.
The Canadian dollar was little changed last week, and little changed on Monday. The Bank of Canada is due to announce its next interest rate decision on Wednesday.
Most global markets kicked off the week with a loss, including Canada and the US. In New York, the NYSE fell 0.5%, while the NSADAQ declined 0.8%. After hitting record-highs last week, the S&P 500 and DJIA large cap indices both gave back about 0.5% on Monday. The US energy sector slipped 0.1%.
The TSX declined 0.5%, dragged lower by a 0.8% loss in energy stocks.
Today's notable energy news:
Encana announced the sale of its natural gas assets in Oklahoma’s Arkoma Basin to an undisclosed buyer for $165 million. The properties produce about 77 MMcf/day, and were acquired through its purchase of Newfield Exploration earlier this year.
Norwegian oil major Equinor has agreed to sell about 55 million Lundin Petroleum shares, in exchange for a 2.6% stake in the Johan Sverdrup field, and US$650 million in cash. The shares are worth about US$1.56 billion, representing a 16% stake in the company. Once the transaction is completed, Equinor's share of Johan Sverdrup will rise to 42.6%, while its stake in Lundin Petroleum will be cut to 4.9%.
In a note to clients, Goldman Sachs recommends investors remain "more cautious in the medium term," reducing its share price targets for a number of US producers, including Apache, Hess, Marathon Oil, Noble Energy, Pioneer Natural Resources, Chesapeake and Encana. The investment firm predicts OPEC production to be flat to lower next year, supporting longer term prices at the "low end" of US$50 to US$60 a barrel for WTI and US$55 to US$65 for Brent. Goldman also says it expects Q2 earnings to decline due to lower oil and gas prices this past quarter.
|Suncor Energy||SU||41.08||▼-0.1||35.53||55.47||D W|
|Imperial Oil||IMO||36.13||▲0.6||33.52||44.91||D W|
|Husky Energy||HSE||12.35||▼-1.2||12.18||22.99||D W|
|TC Energy||TRP||64.86||▼-0.5||47.90||66.93||D W|
|Pembina Pipeline||PPL||48.76||▼-0.8||39.15||50.65||D W|
|Inter Pipeline||IPL||21.98||▲0.8||18.60||25.66||D W|
|Gibson Energy||GEI||23.29||▼-0.1||16.90||24.18||D W|
|LARGE CAP E&P|
|Cdn Natural Res||CNQ||34.11||▼-2.3||30.11||49.08||D W|
|Cenovus Energy||CVE||11.75||▲0.5||8.74||14.84||D W|
|Vermilion Energy||VET||28.42||▲0.2||26.54||49.67||D W|
|Pason Systems||PSI||18.40||▼-0.9||17.18||24.57||D W|
|Mullen Group||MTL||9.80||▼-0.9||9.36||16.93||D W|
|Secure Energy||SES||7.21||▲0.7||6.25||9.44||D W|
|REFINING & MARKETING|
|Parkland Fuel||PKI||41.49||▼-0.4||31.59||47.45||D W|
|Exxon Mobil||XOM||76.48||▲0.5||64.65||87.36||D W|
|Kinder Morgan||KMI||21.06||▼-0.3||14.62||21.50||D W|
|Williams Co||WMB||28.44||▲0.3||20.36||32.22||D W|
|LARGE CAP E&P|
|EOG Resources||EOG||90.15||▲1.8||80.41||133.53||D W|
|Occidental Petro||OXY||49.30||▲0.0||47.00||86.60||D W|
|Anadarko Petro||APC||70.91||▼-0.2||40.40||76.70||D W|
|Pioneer Natural Res||PXD||145.80||▼-0.5||119.08||193.03||D W|
|Baker Hughes||BHGE||25.19||▲2.6||20.09||35.55||D W|
|Ntl-Oilwell Varco||NOV||21.83||▼-0.5||19.57||49.08||D W|
|Marathon Petro||MPC||54.34||▼-1.0||45.47||88.45||D W|
|Phillips 66||PSX||96.96||▲0.2||78.44||123.97||D W|
|Valero Energy||VLO||81.36||▼-0.6||68.81||122.42||D W|
Cabot Oil & Gas (COG): Upgraded from Market Perform to Outperform at Wells Fargo.
Centennial Resource (CDEV): Downgraded from Buy to Hold at SunTrust Banks.
Earthstone Energy (ESTE): Downgraded from Outperform to Market Perform at Wells Fargo.
Oasis Petroleum (OAS): Downgraded from Hold to Sell at SunTrust Banks.
Pioneer Natural Resources (PXD): Downgraded from Buy to Hold at SunTrust Banks.
SM Energy (SM): Downgraded from Outperform to Market Perform at Wells Fargo.
UPDATED: DAILY (END-OF-DAY)
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