Oil prices lock in 30% gain for the first quarter
Both Brent and WTI gained about 30% in the first quarter of this year, the best quarterly showing since the second quarter of 2009.
This week's notable Canadian economic news:
- Real GDP expanded 0.3% in January, better than economists were expecting, and offsetting contractions from the previous two months.
- Non-durable manufacturing led to the upside, gaining almost 2% due to gains made in food, chemicals and petroleum products.
- Oil and gas extraction fell 2.6% in January, due mostly to a 4.1% decline in oil sands extraction, precipitated by Alberta's curtailment program.
- After three months of declines, the Industrial Product Price Index (IPPI) rose 0.3% in February. Gasoline, light fuel oils, diesel and chemical products contributed to most of the gains. Year-over-year, IPPI is now up 1.2%.
- The Raw Materials Price Index (RMPI) rose 4.6% in February, due primarily to a 9% increase in crude prices. Year-over-year, RMPI is still down 0.6%.
- Canada's merchandise trade deficit narrowed from $4.8 billion in December to $4.2 billion in January. Exports rose 2.9% to $47.6 billion, the first increase since July 2018. Crude exports rose 37%, mainly due to higher prices. Imports rose 1.5% to a record $51.8 billion, mainly due to higher aircraft purchases.
- Average weekly earnings were unchanged in January at $1,012. Year-over-year, payrolls are up 2.0% with all provinces posting gains, except Saskatchewan.
- Better than expected GDP data sent bond yields and the Canadian dollar higher this week.
This week's US economic news:
- Fouth quarter GDP grew at an annualized rate of 2.2%, down from a previous estimate of 2.6%, and slightly less than economists were expecting.
- The US trade deficit narrowed from US$60 billion in December to US$51 billion in January. Exports rose 0.9%, while imports declined 2.6%.
- US bond yields dipped lower again this week, briefly inverting the 3-month vs 10-year yield curve.
- Despite lower bond yields, the US dollar moved up 0.7%, primarily due to weakness in other global currencies.
Across the pond this week:
- UK lawmakers rejected Prime Minister Theresa May’s Brexit deal for a third time on Friday, increasing the risk of a hard-Brexit on April 12. Another vote is scheduled for next week.
- The ongoing drama took a toll on both the pound and Euro this week, each falling 1.7% and 0.6% respectively.
- Global bond yields also took a tumble this week. Rates on German and Japanese 10-year notes sank further into negative territory, while the UK 10-year fell below 1%.
Except for Japanese and Chinese exchanges, most global equity markets posted gains for the week, shrugging off concerns over an inverted US yield curve.
In New York, the NYSE gained 1.3% while the S&P 500 rose 1.2%. Except for utilities stocks, most other sectors ended the week in the green.
In Toronto, the TSX rose just 0.1%, dragged lower by a poor showing among the heavily weighted financials and energy sectors.
The TSX energy sector lost 2.2% this week, with losses seen across all subsectors. Integrated names Suncor Energy and Husky Energy dragged to the downside, as did heavy-weights Enbridge and TransCanada. Canadian energy services was the worst performing subsector.
On the S&P 500, energy rose 0.9%. Except for refining stocks, most other energy components posted gains for the week.
Almost all foreign ADRs listed on the NYSE declined this week, in part due to a stronger greenback.
|Suncor Energy||SU||43.31||▼-4.2||35.53||55.47||D W|
|Imperial Oil||IMO||36.48||▲0.1||33.43||44.91||D W|
|Husky Energy||HSE||13.25||▼-2.5||13.24||22.99||D W|
|Pembina Pipeline||PPL||49.09||▼-1.0||37.60||50.45||D W|
|Inter Pipeline||IPL||22.11||▲1.5||18.60||25.66||D W|
|Gibson Energy||GEI||22.97||▲0.4||15.90||23.63||D W|
|LARGE CAP E&P|
|Cdn Natural Res||CNQ||36.69||▼-0.9||30.11||49.08||D W|
|Cenovus Energy||CVE||11.60||▼-1.4||8.74||14.84||D W|
|Vermilion Energy||VET||32.99||▼-1.8||26.67||49.67||D W|
|Pason Systems||PSI||19.50||▼-2.8||16.61||24.57||D W|
|Mullen Group||MTL||11.98||▼-1.8||11.26||16.93||D W|
|Secure Energy||SES||8.18||▼-1.7||6.25||9.44||D W|
|REFINING & MARKETING|
|Parkland Fuel||PKI||40.83||▲3.2||27.96||47.45||D W|
|Exxon Mobil||XOM||80.80||▲0.4||64.65||87.36||D W|
|Kinder Morgan||KMI||20.01||▲0.6||14.62||20.44||D W|
|Williams Co||WMB||28.72||▲0.9||20.36||32.22||D W|
|LARGE CAP E&P|
|EOG Resources||EOG||95.18||▲1.6||82.04||133.53||D W|
|Occidental Petro||OXY||66.20||▲1.5||56.83||87.67||D W|
|Anadarko Petro||APC||45.48||▲5.2||40.40||76.70||D W|
|Pioneer Natural Res||PXD||152.28||▲8.3||119.08||213.40||D W|
|Baker Hughes||BHGE||27.72||▲2.1||20.09||37.76||D W|
|Ntl-Oilwell Varco||NOV||26.64||▲0.0||24.27||49.08||D W|
|Marathon Petro||MPC||59.85||▼-2.4||54.29||88.45||D W|
|Phillips 66||PSX||95.17||▼-0.8||78.44||123.97||D W|
|Valero Energy||VLO||84.83||▲0.2||68.81||126.98||D W|
- BoC Governor S. Poloz gives speech at Nunavut Mining Symposium in Iqaluit, NU
- API Weekly Statistical Bulletin
- Teck Analyst Day in Toronto, ON
- EIA Weekly Petroleum Status Report
- EIA Weekly Natural Gas Storage Report
- StatsCan Labour Force Survey (Mar 2019 data)
- Baker Hughes Weekly Rig Counts