Energy stocks kick off the trading week with another loss

Energy stocks kick off the trading week with another loss

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Today's energy market update:

  • Oil prices sank for the first half of last week, but rallied nicely in the second half. Continuing on that uptrend, Brent nudged up another 0.1% on Monday, while WTI rose 0.8%.

  • Canadian Light rose 0.3%, as its discount to WTI widened to about US$2.80 a barrel. Canada's heavy oil benchmark rose 1.6%, as its discount to WTI narrowed to US$12.40.

Today's supply/demand update:

  • Late last week, the International Energy Agency (IEA) once again warned that trade tensions will drag on the global economy, prompting it to lower its 2019 and 2020 oil demand growth forecast by 100,000 bbl/day, to 1.1 and 1.3 million bbl/day, respectively.

  • The agency estimates that OPEC output declined by 200,000 bbl/day in July. Saudi Arabia’s production fell to 29.7 million bbl/day, 700,000 bbl/day below its agreed quota, helping to reduce global stockpiles. However, the IEA calls the pullback "a temporary phenomenon," as it expects non-OPEC production growth to be at a "very strong" 2.2 million bbl/day next year, leaving oil markets "well supplied."

  • OPEC is scheduled to release its August Monthly Oil Market Report on Tuesday.

Today's currency and equity market action:

  • The Chinese yuan weakened to an 11-year low last week, prompting President Trump to label the country "a currency manipulator," thereby triggering a sell-off in global equity markets. The yuan trades on a "managed floating exchange rate system," although the Chinese government denies purposefully devaluing its currency for the purpose of boosting exports.

  • Goldman Sachs also chimed in with its two-cents over the weekend, warning that strained tensions between the US and China will drop fourth-quarter GDP growth to 1.8%, down from its previous forecast of 2%. Ongoing geopolitical tensions in Italy, Argentina and Hong Kong also continue to weigh on equity markets, dragging the NYSE and S&P 500 lower by another 1.2% on Monday. The Dow shed another 400 points on Monday, bringing total losses to almost 1,300 points since the end of July.

  • In Toronto, the TSX lost 0.6%, dragged lower by a 1.3% decline in the Canadian energy sector. The SPX energy basket fell a comparable 1.4%.

Today's notable energy news:

  • Inter Pipeline made headlines last week after it announced plans to sell its European Bulk Liquids Storage Business. The company owns about 37 million barrels of storage capacity across 23 terminals in the UK, Denmark, Sweden and Germany. The division is estimated to be worth between $1.2 and $1.6 billion.

  • The company also confirmed the receipt of an "unsolicited, non-binding, conditional and indicative" buyout offer. According to the Globe and Mail, Inter Pipeline rejected an offer of $30 a share from an unnamed buyer, valuing the company at about $12.4 billion. IPL stock retreated slightly on Monday, but remains up 10% since the news broke last week.

  • UK-based Tullow Oil announced a major oil discovery in the Orinduik block, located offshore Guyana, owned jointly owned with Total, Qatar Petroleum and Toronto-based Eco Oil and Gas. Although the size of the deposit was not disclosed, Tullow shares shot up 20% on the news, while Eco shares (EOG.V) gained over 60%.

  • Saudi Aramco reported a net profit of just US$46.9 billion in the first half of this year, down from US$53 billion for the same period last year. The decline was blamed on lower oil prices. The company also signed a letter of intent to buy 20% of Indian refining and petrochemicals firm Reliance, as it continues its mission of diversifying away from oil revenues. Earlier this year, the company purchased 70% of petrochemicals giant Saudi Basic Industries Corp (SABIC) for US$69 billion.

OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$58.57▲0.150.47
 
86.29
WTI$54.93▲0.842.53
 
76.41
SCO$56.38▲0.525.15
 
71.86
C5+$52.81▲0.837.04
 
68.87
CDN LT$52.11▲0.320.83
 
63.86
WCS$42.53▲1.612.59
 
56.30

CRUDE OIL FUTURES CURVES
BRENT
WTI
█ AUG 12   █ AUG 5   █ JUL 29   █ JUL 22   (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
CES Energy (CEU +2.5%)
Encana (ECA +1.8%)
TC Energy (TRP +0.6%)
Peyto Exploration (PEY +0.3%)
Pason Systems (PSI +0.3%)
12-MO
HIGHS
None
TSX BEARISH INDICATORS
BOTTOM
5
Enerflex (EFX -11.8%)
Nuvista Energy (NVA -8.4%)
Precision Drilling (PD -8.2%)
Birchcliff Energy (BIR -6.8%)
Ensign Energy Svcs (ESI -6.6%)
12-MO
LOWS
Husky Energy (HSE -1.1%)
Tourmaline (TOU -2.3%)
Enerflex (EFX -11.8%)
Birchcliff Energy (BIR -6.8%)
Ensign Energy Svcs (ESI -6.6%)
Gran Tierra (GTE -5.1%)
Kelt Exploration (KEL -4.6%)
Nuvista Energy (NVA -8.4%)
Precision Drilling (PD -8.2%)
TORC O&G (TOG -3.7%)
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Suncor EnergySU37.90▲0.135.53
 
54.51D   W
Imperial OilIMO33.05▲0.032.44
 
44.69D   W
Husky EnergyHSE8.85▼-1.18.82
 
22.99D   W
MIDSTREAM
EnbridgeENB44.62▼-0.139.40
 
51.22D   W
TC EnergyTRP63.86▲0.647.90
 
67.15D   W
Pembina PipelinePPL48.50▼-0.639.15
 
50.65D   W
Inter PipelineIPL24.24▼-2.318.60
 
25.24D   W
Keyera KEY33.37▼-1.024.05
 
38.43D   W
Gibson EnergyGEI23.31▼-1.516.90
 
24.43D   W
LARGE CAP E&P
Cdn Natural ResCNQ31.41▼-2.630.11
 
46.39D   W
Cenovus EnergyCVE11.26▼-0.28.74
 
14.26D   W
EncanaECA5.79▲1.85.25
 
17.85D   W
TourmalineTOU13.58▼-2.313.45
 
23.86D   W
Vermilion EnergyVET19.88▼-3.519.77
 
43.91D   W
SERVICES
Pason SystemsPSI16.72▲0.316.30
 
24.57D   W
EnerflexEFX14.12▼-11.814.04
 
20.38D   W
Mullen Group MTL9.40▼-2.79.15
 
16.93D   W
ShawcorSCL17.18▼-6.415.11
 
28.89D   W
Secure EnergySES6.41▼-2.46.25
 
9.44D   W
REFINING & MARKETING
Parkland FuelPKI42.55▼-1.431.59
 
47.45D   W
S&P 500 ENERGY STOCKS
SPX BULLISH INDICATORS
TOP 5
Anadarko Petro (APC +17.9%)
Ntl-Oilwell Varco (NOV +0.5%)
Diamondback (FANG +0.5%)
Pioneer Natural Res (PXD +0.4%)
Hess Corp (HES +0.4%)
12-MO
HIGHS
None
SPX BEARISH INDICATORS
BOTTOM
5
Cimarex Energy (XEC -4.7%)
Occidental Petro (OXY -4.5%)
Marathon Petro (MPC -4.1%)
HollyFrontier (HFC -3.9%)
Helmerich & Payne (HP -3.4%)
12-MO
LOWS
Halliburton (HAL -0.6%)
Apache (APA -1.9%)
Helmerich & Payne (HP -3.4%)
Cimarex Energy (XEC -4.7%)
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Exxon MobilXOM69.63▼-0.564.65
 
87.36D   W
ChevronCVX121.55▼-0.7100.22
 
127.60D   W
MIDSTREAM
Kinder MorganKMI20.34▼-0.214.62
 
21.50D   W
Williams CoWMB23.70▼-1.320.36
 
32.05D   W
ONEOKOKE69.27▲0.350.26
 
72.38D   W
LARGE CAP E&P
ConocoPhillipsCOP53.12▼-1.652.30
 
80.24D   W
EOG ResourcesEOG77.92▼-1.774.84
 
133.53D   W
Occidental PetroOXY44.99▼-4.544.88
 
83.35D   W
Anadarko PetroAPC0.17▲17.90.08
 
0.85D   W
Pioneer Natural ResPXD126.75▲0.4114.79
 
189.78D   W
SERVICES
SchlumbergerSLB34.27▼-0.733.94
 
66.10D   W
HalliburtonHAL19.41▼-0.619.10
 
42.57D   W
Baker HughesBHGE23.42▼-1.120.09
 
35.04D   W
Ntl-Oilwell VarcoNOV20.18▲0.519.57
 
47.46D   W
TechnipFMCFTI24.03▼-1.918.20
 
32.91D   W
REFINERS
Marathon PetroMPC46.41▼-4.145.47
 
88.45D   W
Phillips 66PSX98.31▼-2.178.44
 
123.45D   W
Valero EnergyVLO77.15▼-2.268.81
 
122.42D   W
HollyFrontierHFC46.68▼-3.937.73
 
76.56D   W
NYSE ADRs
COMPANY TICKER CLOSE %CHG L 52WK H CHART
Royal Dutch ShellRDS.A57.17▼-0.255.04
 
70.09D   W
TotalTOT48.63▼-0.447.91
 
65.69D   W
BPBP36.65▼-0.436.28
 
47.16D   W
EniE29.62▲0.329.43
 
39.16D   W
EquinorEQNR16.65▼-1.416.57
 
28.93D   W
ANALYST RATINGS

UPGRADES

  • CES Energy Solutions (CEU.TO): Upgraded from Sector Perform to Outperform at RBC.

  • Inter Pipeline (IPL.TO): Upgraded from Neutral to Outperform at CIBC and from Underperform to Market Perform at Raymond James.

  • National Oilwell Varco (NOV): Upgraded from Neutral to Positive at Susquehanna Bancshares and Societe General.

DOWNGRADES

  • Enerflex (EFX.TO): Downgraded from Buy to Hold at TD Securities.

  • Inter Pipeline (IPL.TO): Downgraded from Strong Buy to Hold at Industrial Alliance Securities.

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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