Energy outperforms on Monday, giving equity markets a much needed boost
Today's energy market action:
Oil prices moved higher on Monday, following through on Friday's gains, and helped by more geopolitical tensions in the Middle East.
Brent rose almost 2%, while WTI gained 2.4%. Canadian benchmarks rose in tandem with WTI, as their respective discounts were little changed for the day.
Henry Hub rose 0.5%, moving back above US$2.20/MMBtu.
Yemeni separatists launched a drone into the Shaybah oilfield over the weekend, sparking a fire at a gas processing plant. Shaybah accounts for 10% of Saudi Aramco's total oil production, but the company says crude output was not impacted.
Today's currency and equity market update:
China moved to lower borrowing costs over the weekend, helping to boost trader confidence on Monday, and easing concerns of an imminent recession. Global bond yields mostly moved higher, including in the US, where 30-year notes now sits comfortably above 2.0%.
The US dollar continues to slowly creep higher, gaining another 0.2% on Monday. Most other global currencies declined for the day, including the Canadian dollar, which fell over 0.4%.
US equity markets posted a third consecutive day of gains on Monday. The NYSE moved up 0.9%, while the NASDAQ rose 1.4%. The Dow Jones Industrial Average rose 250 points (1.0%) while the S&P 500 Large Caps ended the day 1.2% higher. Gains were seen across all sectors, including energy, which rose over 2%, making it Monday's best performer.
In Toronto, the TSX rose 1.0%, with gains also seen across most sectors. Energy was also the best performer in Canada, rising 2.5%.
Today's notable energy news:
ExxonMobil says its Hibernia platform offshore Newfoundland and Labrador suffered a power outage on Sunday evening, resulting in the loss of compressed air, which triggered the facility's fire-water deluge system. Water and oil, collected in the platform's drainage system, ultimately overflowed about 14 barrels of oil into the Atlantic ocean. Power has since been restored, but the platform remains offline pending clean-up and a full investigation. Hibernia had just restarted last Thursday, four weeks after another spill forced it to cease operations. The facility is jointly owned with Suncor Energy and Chevron Corp.
MEG Energy has sent a letter to the National Energy Board (NEB), expressing opposition to Enbridge's plan to convert its Mainline network from monthly nominations to a 90% contract-based system. MEG already has commitments on Flanagan South, and says it isn't a large-enough producer to commit additional volumes on the Mainline. Earlier this month, the Explorers and Producers Association of Canada expressed a similar sentiment, on behalf of smaller producers who prefer the old system. Enbridge says minimum commitments will be just 2,200 bbl/day, small enough to accommodate junior producers. Mainline is North America's largest pipeline network, transporting up to 3 million bbl/day of crude out of Western Canada, into the US Midwest, southern Ontario and Quebec. If approved by the NEB, the new plan takes effect in mid-2021.
Bonterra Energy confirmed the release of an oil/water emulsion from a ruptured pipeline into Washout Creek, about 25 km southwest of Drayton Valley, AB. The company says flooding caused the creek to collapse, severing the pipeline. Clean-up is currently underway and is expected to last about three weeks. Size of the spill is currently estimated at 250 barrels, but Bonterra says "a significant volume of fluid" has already been recovered.
Woodfibre LNG President David Keane says the company's LNG export facility in Squamish is expected to be sanctioned and begin construction "at the end of the summer or shortly thereafter," pending the finalization of EPC contracts. The $1.6 billion project is designed to export 2.1 million tonnes of LNG annually. Woodfibre LNG is a wholly-owned subsidiary of Singapore-based Pacific Oil and Gas.
Privately owned Pilot Flying J has agreed to acquire NGL Energy Partners’ TransMontaigne Product Services, for about US$300 million. The assets include terminal agreements and space on the Colonial and Plantation product pipelines, as well as two refined products terminals in Georgia.
|Suncor Energy||SU||38.08||▲2.1||35.53||54.51||D W|
|Imperial Oil||IMO||33.13||▲1.4||32.09||44.69||D W|
|Husky Energy||HSE||9.22||▲5.1||8.48||22.99||D W|
|TC Energy||TRP||64.79||▲0.9||47.90||67.15||D W|
|Pembina Pipeline||PPL||49.64||▲1.4||39.15||50.65||D W|
|Inter Pipeline||IPL||24.77||▲1.0||18.60||25.24||D W|
|Gibson Energy||GEI||23.53||▲2.2||16.90||24.43||D W|
|LARGE CAP E&P|
|Cdn Natural Res||CNQ||31.64||▲1.9||30.11||46.39||D W|
|Cenovus Energy||CVE||11.00||▲1.4||8.74||14.26||D W|
|Vermilion Energy||VET||20.39||▲2.5||19.14||43.91||D W|
|Pason Systems||PSI||16.59||▲1.3||16.21||24.57||D W|
|Mullen Group||MTL||9.16||▲2.4||8.65||16.93||D W|
|Secure Energy||SES||6.18||▲1.5||5.94||9.44||D W|
|REFINING & MARKETING|
|Parkland Fuel||PKI||43.20||▲1.0||31.59||47.45||D W|
|Exxon Mobil||XOM||69.45||▲1.7||64.65||87.36||D W|
|Kinder Morgan||KMI||20.41||▲1.4||14.62||21.50||D W|
|Williams Co||WMB||23.56||▲1.2||20.36||31.05||D W|
|LARGE CAP E&P|
|EOG Resources||EOG||77.81||▲2.5||73.95||133.53||D W|
|Occidental Petro||OXY||45.58||▲2.3||43.08||83.35||D W|
|Pioneer Natural Res||PXD||128.22||▲2.9||114.79||189.78||D W|
|Hess Corp||HES||63.15||▲5.6||35.59||74.81||D W|
|Baker Hughes||BHGE||21.42||▲1.7||20.09||34.49||D W|
|Ntl-Oilwell Varco||NOV||19.31||▲3.6||18.05||47.46||D W|
|Marathon Petro||MPC||47.81||▲3.4||43.96||88.45||D W|
|Phillips 66||PSX||98.76||▲0.9||78.44||121.55||D W|
|Valero Energy||VLO||79.70||▲2.0||68.81||122.42||D W|
Range Resources (RRC): Upgraded from Neutral to Buy at MKM Partners.
CARRIZO OIL & GAS (CRZO): Downgraded from Buy to Hold at Williams Capital.
EnLink Midstream (ENLC): Downgraded from Outperform to Neutral at Credit Suisse.
Gulfport Energy (GPOR): Downgraded from Buy to Hold at Williams Capital.
Holly Energy Partners (HEP): Downgraded from Neutral to Underperform at Credit Suisse.
Royal Dutch Shell (RDS.A): Downgraded from Overweight to Equal Weight at Barclays.
Whiting Petroleum (WLL): Downgraded from Overweight to Equal Weight at Stephens and from Outperform to Sector Perform at Scotiabank.
UPDATED: DAILY (END-OF-DAY)
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