Energy stocks dragged lower by falling stock markets, despite higher oil prices
Today's energy market action:
Oil prices posted another day of gains on Tuesday, but energy stocks failed to go along for the ride.
Brent rose 0.5%, moving back above US$60/bbl. WTI and Canada's light oil benchmarks all rose a more modest 0.2%.
Western Canadian Select (WCS) was today's big winner, rising 1.6%, as its discount to WTI narrowed from US$13.30 to US$12.75 a barrel.
Gasoline and heating oil prices also moved up over 1% on Tuesday.
According to the American Petroleum Institute, US crude stockpiles are estimated to have fallen by 3.5 million barrels last week. Official numbers from the Energy Information Administration are due to be released Wednesday morning.
Today's treasury, currency and equity market action:
Bond yields retreated on Tuesday, reversing most of Monday's gains. Minutes from last month's FOMC meeting are due to be released on Wednesday afternoon. Currency markets were little moved for the day.
Equity markets in New York pulled back for the first time in four trading days, with both the NYSE and NASDAQ posting a 0.7% loss. The S&P 500 declined 0.8%, with all sectors ending the day lower. SPX energy stocks slid 1% for the day, with all subsectors posting losses on Tuesday.
In Toronto, the TSX fell 0.6%, dragged lower by a 1.3% decline in the energy space. Declines were also seen across all energy subsectors.
Today's notable energy news:
Due to ongoing pipeline delays, Alberta's UCP government says it plans to extend its curtailment program through the end of 2020. The first 20,000 bbl/day of output has now been excluded, lifting October's production quotas by about 25,000 bbl/day. The government says out of the province's 300 oil producers, only 16 companies are affected.
Bankrupt junior producer Connacher Oil and Gas says production in the first half of 2019 fell 15% y/y to 10,780 bbl/day, primarily due to natural declines. Connacher has been under creditor protection since the spring of 2016. The company's main asset is the Great Divide SAGD facility near Fort McMurray.
US Secretary of State Mike Pompeo says sanctions on Iran has taken 2.7 million bbl/day of crude off world oil markets. Iran exported just 100,000 bbl/day in July, helping OPEC meet its curtailment quotas.
A consortium led by China National Petroleum Corporation (CNPC) made a new oil discovery in South Sudan, estimated to hold more than 300 million barrels of recoverable oil. The country currently produces 185,000 bbl/day, and hopes to raise output to 200,000 bbl/day next year.
Equinor and its partners, OMV and Petoro, also made a new discovery in the Barents Sea, estimated to hold as much as 65 million barrels of oil. The company also closed on its recent acquisition of a 22.5% stake in Caesar Tongo, located in the US Gulf of Mexico, boosting its interest to 46%. Caesar Tongo is owned jointly with Chevron and operator Anadarko Petroleum.
|Suncor Energy||SU||37.46||▼-1.6||35.53||54.51||D W|
|Imperial Oil||IMO||32.64||▼-1.5||32.09||44.69||D W|
|Husky Energy||HSE||9.24||▲0.2||8.48||22.99||D W|
|TC Energy||TRP||64.12||▼-1.0||47.90||67.15||D W|
|Pembina Pipeline||PPL||49.27||▼-0.8||39.15||50.65||D W|
|Inter Pipeline||IPL||24.86||▲0.4||18.60||25.24||D W|
|Gibson Energy||GEI||23.43||▼-0.4||16.90||24.43||D W|
|LARGE CAP E&P|
|Cdn Natural Res||CNQ||30.86||▼-2.5||30.11||46.39||D W|
|Cenovus Energy||CVE||10.95||▼-0.5||8.74||14.26||D W|
|Vermilion Energy||VET||19.99||▼-2.0||19.14||43.91||D W|
|Pason Systems||PSI||16.46||▼-0.8||16.21||24.57||D W|
|Mullen Group||MTL||9.25||▲1.0||8.65||16.93||D W|
|Secure Energy||SES||6.06||▼-1.9||5.94||9.44||D W|
|REFINING & MARKETING|
|Parkland Fuel||PKI||42.90||▼-0.7||31.59||47.45||D W|
|Exxon Mobil||XOM||69.03||▼-0.6||64.65||87.36||D W|
|Kinder Morgan||KMI||20.14||▼-1.4||14.62||21.50||D W|
|Williams Co||WMB||23.53||▼-0.1||20.36||31.05||D W|
|LARGE CAP E&P|
|EOG Resources||EOG||76.69||▼-1.4||73.95||133.53||D W|
|Occidental Petro||OXY||45.26||▼-0.7||43.08||83.35||D W|
|Pioneer Natural Res||PXD||126.60||▼-1.4||114.79||189.78||D W|
|Hess Corp||HES||62.60||▼-0.9||35.59||74.81||D W|
|Baker Hughes||BHGE||21.11||▼-1.5||20.09||34.49||D W|
|Ntl-Oilwell Varco||NOV||18.88||▼-2.2||18.05||47.46||D W|
|Marathon Petro||MPC||46.72||▼-2.3||43.96||88.45||D W|
|Phillips 66||PSX||98.68||▼-0.1||78.44||121.55||D W|
|Valero Energy||VLO||78.01||▼-2.2||68.81||122.42||D W|
C&J Energy Services (CJ): Upgraded from Hold to Buy at Jefferies Financial.
BP Midstream Partners (BPMP): Downgraded from Overweight to Neutral at JPMorgan.
Shell Midstream Partners (SHLX): Downgraded from Neutral to Underweight at JPMorgan.
UPDATED: DAILY (END-OF-DAY)
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