Energy stocks move higher on Wednesday, erasing Tuesday's losses

Energy stocks move higher on Wednesday, erasing Tuesday's losses

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Today's energy market action:

  • Oil markets were mixed on Wednesday, as oil prices mostly moved lower, but energy stocks gained ground, rising with broader markets.

  • Brent rose 0.4%, while WTI declined 1.2%, due in part to yesterday's expiry of the September contract. Canadian Light and Synthetic Crude (SCO) declined on par with WTI. Western Canadian Select (WCS) fell 1.7%, as the heavy oil discount rose slightly.

  • Edmonton Condensate (C5+) sank over 3%, as its differential to WTI widened by almost US$1 to US$6 a barrel. 

  • Henry Hub natural gas prices declined over 2%, falling back below US$2.20/MMBtu on Wednesday.

Today's treasury, currency and equity market action:

  • In meeting minutes released this afternoon, US Fed Chair Jerome Powell called the last rate cut a "mid-cycle adjustment," reducing expectations for further rate cuts down the road, despite the risk of an inverted yield curve. Bond yields moved higher on the news, dropping the yield curve (10 vs 2-year) to 0.03%. The US dollar perked up 0.1%, reversing yesterday's declines.

  • According to Statistics Canada, the national inflation rate averaged 2.0% in July, matching figures for June. Gasoline prices rose slightly in July, but remain almost 7% lower than the same time last year. The news helped boost the loonie 0.2% for the day.

  • Equity markets mostly moved higher on Wednesday, erasing much of yesterday's losses. The NYSE and S&P 500 Large Cap Index both rose 0.8%. All US sectors moved higher, including energy, which also rose 0.8%.

  • In Toronto, the TSX moved up 0.6%, with gains seen across most sectors. Energy stocks outperformed on Wednesday, rising almost 1%.

  • Except for energy services, all other energy subsectors moved higher, on both sides of the border. NYSE listed ADRs also gained ground on Wednesday.

Today's notable energy news:

  • According to the Energy Information Administration (EIA), crude stockpiles shrank by 2.7 million barrels south of the border last week, helped by higher exports and lower imports. Imports of Canadian crude dipped slightly to 3.6 million bbl/day, while total output held steady at 12.3 million bbl/day.

  • Pembina Pipeline (PPL) announced a deal to buy Kinder Morgan Canada (KML) for $2.3 billion in stock. Pembina is offering 0.31 PPL shares per KML share, representing a 38% premium to the previous day's close. The assets include the Edmonton Rail Terminal, crude storage capacity in Edmonton, the Vancouver Wharves Terminal and the Canadian section of the Cochin pipeline, which ships diluent from Illinois to Fort Saskatchewan, Alberta. Pembina also agreed to buy the US portion of Cochin for $2.05 billion in cash, and committed to boosting its monthly dividend by $0.01 per share, or about 5%. The acquisition is subject to approval by at least two-thirds of KML and PPL shareholders.

  • Crown corporation Trans Mountain has given its contractors 30 days notice to begin mobilizing crews, in preparation for the restart of construction activities on the Trans Mountain Expansion (TMX) later this summer. The company says it expects to obtain all remaining regulatory approvals and construction permits "over the coming months," which now puts the in-service date to the middle of 2022.

  • Tamarack Energy Valley CEO Brian Schmidt says he's ready to divert some capital back to Alberta in 2020, now that the provincial government has raised its curtailment threshold from 10,000 to 20,000 bbl/day. Aside from Tamarack, Whitecap Resources, Athabasca Oil Corp, Pengrowth Energy, Baytex Energy and Obsidian Energy will also now be exempted from production quotas, which could potentially lead to higher drilling activity in the province next year.

  • ConocoPhillips and Encana have asked US federal regulators to reject a plan by Plains All American Pipeline (PAA) to add a tariff surcharge on its 670,000 bbl/day Cactus II pipeline. PAA announced plans to charge shippers a US$0.05/bbl fee to offset higher construction costs that resulted from a 25% tariff imposed by the Trump administration on imported steel. The tariff added US$40 million to the cost of construction, which was originally pegged at US$1.1 billion. PAA submitted three requests for waivers, two of which were rejected, and a third which is awaiting a decision from the US Commerce Department.

  • Motiva Enterprises has struck a deal to buy the Flint Hills Resources chemical plant, located adjacent to its 607,000 bbl/day refinery in Port Arthur, Texas. Motiva is the US refining arm of Saudi Aramco, and says it plans to operate the chemical plant as it builds three more petrochemical units in Port Arthur as part of an US$18 billion expansion. Financial terms of the deal were not disclosed.

  • According to the EIA, OPEC members earned US$711 billion in revenues from its oil exports last year, up 29% from the previous year. Those numbers are well below the record high of almost US$1.2 trillion, reached in 2012. OPEC oil export revenues are expected to slide to US$593 billion this year, and US$556 billion in 2020, due to falling output.

OIL PRICES - DAILY % CHANGE
WTI DIFFERENTIALS
STREAM CLOSE %CHG L 52WK H
BRENT$60.30▲0.450.47
 
86.29
WTI$55.68▼1.242.53
 
76.41
SCO$54.98▼1.225.15
 
67.81
C5+$49.68▼3.137.04
 
68.87
CDN LT$50.33▼1.320.83
 
61.30
WCS$42.83▼1.712.59
 
56.30

CRUDE OIL FUTURES CURVES
BRENT
WTI
█ AUG 21   █ AUG 14   █ AUG 7   █ JUL 31   (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
MEG Energy (MEG +4.9%)
Cenovus Energy (CVE +3.7%)
Peyto Exploration (PEY +2.5%)
Shawcor (SCL +2.5%)
Cdn Natural Res (CNQ +1.7%)
12-MO
HIGHS
None
TSX BEARISH INDICATORS
BOTTOM
5
Precision Drilling (PD -5%)
Nuvista Energy (NVA -2.9%)
Baytex Energy (BTE -2.8%)
Birchcliff Energy (BIR -2.7%)
Kelt Exploration (KEL -2.4%)
12-MO
LOWS
Gran Tierra (GTE -0.6%)
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Suncor EnergySU37.83▲1.035.53
 
54.51D   W
Imperial OilIMO32.71▲0.232.09
 
44.69D   W
Husky EnergyHSE9.25▲0.18.48
 
22.99D   W
MIDSTREAM
EnbridgeENB45.06▲1.539.40
 
51.22D   W
TC EnergyTRP64.98▲1.347.90
 
67.15D   W
Pembina PipelinePPL49.09▼-0.439.15
 
50.65D   W
Inter PipelineIPL24.70▼-0.118.60
 
25.24D   W
Keyera KEY33.00▲1.624.05
 
38.17D   W
Gibson EnergyGEI23.57▲0.616.90
 
24.43D   W
LARGE CAP E&P
Cdn Natural ResCNQ31.39▲1.730.11
 
46.39D   W
Cenovus EnergyCVE11.36▲3.78.74
 
14.26D   W
EncanaECA5.77▼-1.45.25
 
17.60D   W
TourmalineTOU13.31▼-0.712.40
 
23.86D   W
Vermilion EnergyVET20.02▲0.219.14
 
43.91D   W
SERVICES
Pason SystemsPSI16.52▲0.416.21
 
24.57D   W
EnerflexEFX13.06▼-0.212.77
 
20.38D   W
Mullen Group MTL9.250.08.65
 
16.93D   W
ShawcorSCL16.99▲2.515.11
 
28.89D   W
Secure EnergySES6.00▼-1.05.94
 
9.44D   W
REFINING & MARKETING
Parkland FuelPKI42.91▲0.331.59
 
47.45D   W
S&P 500 ENERGY STOCKS
SPX BULLISH INDICATORS
TOP 5
Hess Corp (HES +3.6%)
Chevron (CVX +1.5%)
Williams Co (WMB +1.4%)
Kinder Morgan (KMI +1.2%)
Ntl-Oilwell Varco (NOV +1.1%)
12-MO
HIGHS
None
SPX BEARISH INDICATORS
BOTTOM
5
Halliburton (HAL -2.4%)
Marathon Oil (MRO -1.6%)
HollyFrontier (HFC -0.9%)
Schlumberger (SLB -0.5%)
Occidental Petro (OXY -0.4%)
12-MO
LOWS
None
COMPANY TICKER CLOSE %CHG L 52WK H CHART
INTEGRATED
Exxon MobilXOM69.72▲1.064.65
 
87.36D   W
ChevronCVX117.88▲1.5100.22
 
127.60D   W
MIDSTREAM
Kinder MorganKMI20.39▲1.214.62
 
21.50D   W
Williams CoWMB23.88▲1.420.36
 
31.05D   W
ONEOKOKE71.18▲0.150.26
 
72.38D   W
LARGE CAP E&P
ConocoPhillipsCOP52.63▼-0.150.59
 
80.24D   W
EOG ResourcesEOG77.22▲0.673.95
 
133.53D   W
Occidental PetroOXY45.06▼-0.443.08
 
83.35D   W
Pioneer Natural ResPXD126.94▲0.3114.79
 
189.78D   W
Hess CorpHES64.83▲3.635.59
 
74.81D   W
SERVICES
SchlumbergerSLB33.69▼-0.531.11
 
65.61D   W
HalliburtonHAL18.60▼-2.417.46
 
42.57D   W
Baker HughesBHGE21.24▲0.620.09
 
34.49D   W
Ntl-Oilwell VarcoNOV19.08▲1.118.05
 
47.46D   W
TechnipFMCFTI23.990.018.20
 
32.91D   W
REFINERS
Marathon PetroMPC47.23▲1.143.96
 
88.45D   W
Phillips 66PSX99.30▲0.678.44
 
121.55D   W
Valero EnergyVLO78.40▲0.568.81
 
122.42D   W
HollyFrontierHFC45.37▼-0.937.73
 
76.56D   W
NYSE ADRs
COMPANY TICKER CLOSE %CHG L 52WK H CHART
Royal Dutch ShellRDS.A56.24▲1.054.78
 
70.09D   W
TotalTOT49.12▲1.247.70
 
65.69D   W
BPBP36.75▲0.835.73
 
47.16D   W
EniE29.47▲0.928.56
 
39.16D   W
EquinorEQNR17.14▲2.916.24
 
28.93D   W
ANALYST RATINGS

UPGRADES

  • None.

DOWNGRADES

  • None.

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
Canada's light oil benchmarks move higher, as differentials narrow

Canada's light oil benchmarks move higher, as differentials narrow

Energy stocks dragged lower by falling stock markets, despite higher oil prices

Energy stocks dragged lower by falling stock markets, despite higher oil prices