Canadian crude prices rise with global benchmarks, gaining 8% for the week

Canadian crude prices rise with global benchmarks, gaining 8% for the week

This week's Energy Market Summary for the week ending Friday April 5, 2019:
  • Brent finally cracks US$70
  • Canadian Light and WCS move up another 8%
  • Contango narrows on WTI, as markets move into balance
  • US output hits new record high
  • OPEC output hits 4-year low in March
  • Canadian rig counts slump to just 22 ...
    ... while US rig counts post first gain in 7 weeks
  • Trump mulls more sanctions on Iran ...
    ... and few waivers for Iranian buyers.
WHAT'S MOVING OIL PRICES THIS WEEK
GEOPOLITICS
BULLISH
  • The Trump Administration is considering additional sanctions on Iran, timed to coincide with the upcoming one-year anniversary of its first round of sanctions.
  • The US government also hinted it may pull waivers granted to Italy, Greece and Taiwan, preventing them from continuing to import Iranian crude.
USD INDEX
NEUTRAL
  • The US dollar was little changed for the week.
SUPPLY
NEUTRAL
  • According to Baker Hughes, the US put 15 new oil rigs into service this week, the first increase in 7 weeks.
  • Canada lost another 13 rigs, leaving just 22 oil rigs in service. Canadian rig counts are now down by 137 from last February, due in part to the spring thaw.
  • According to the Energy Information Administration, US output was estimated to hit a record 12.2 million bbl/day last week.
  • OPEC output hit a 4-year low of 30.4 million bbl/day in March, thanks to a 220,000 bbl/day cut from Saudi Arabia and 150,000 bbl/day reduction out of Venezuela.
DEMAND
NEUTRAL
  • No new news on the demand front this week.
  • Updated supply/demand forecasts are due to be released from OPEC and the International Energy Agency (IEA) next week.
SENTIMENT
BULLISH
  • After taking a brief pause in mid-March, oil prices have clearly resumed their uptrend.
  • Contango continues to diminish on WTI, as Venezuelan sanctions, Alberta's curtailment program, and rising US crude exports continue to shrink the North American surplus.
  • Net longs continue to rise for both Brent and WTI managed money contracts.
OIL MARKETS
STREAM CLOSE %CHG L 52WK H
BRENT$70.34▲2.950.47
 
86.29
WTI$63.08▲4.942.53
 
76.41
CDN LT$59.57▲7.637.04
 
71.40
C5+$58.96▲5.420.83
 
69.32
WCS$54.87▲8.112.59
 
56.21

Credit Suisse raised its 2019 price forecast for both Brent and WTI by US$3.50 per barrel, due to falling OPEC production. The bank now expects Brent to average US$66.50 this year, while WTI is forecasted at US$57.50.

 
us-inventory-report.jpg

WEEKLY US INVENTORY REPORT

APR 3, 2019

OUTPUT TOUCHES A NEW RECORD HIGH DESPITE FALLING RIG COUNTS

 
CRUDE OIL FUTURES CURVES
BRENT
WTI
█ OIL PRICE (USD/BBL)   █ MONTH 5 VS NEAR MONTH
MANAGED MONEY: FUTURES & OPTIONS
BRENT
WTI
█ OIL PRICE (USD/BBL)   █ LONG   █ SHORT █ NET LONG (1000 BBL CONTRACTS)
CURRENCIES & BONDS

This week's notable Canadian economic data:

  • After several months of big gains, StatsCanada reported the loss of 7,200 jobs last month. Saskatchewan, PEI and New Brunswick added new positions, while most the other provinces were little changed. The national unemployment rate held steady at 5.8% in March

  • Canadian bond yields rose in sympathy with US interest rates. The loonie sank 0.3% for the week, ending Friday below 75 cents.

This week's US economic news:

  • Chinese President Xi Jinping said his country was making progress in trade talks with the US. President Donald Trump initially hinted a deal could be announced in early May, but later warned of further retaliatory action if remaining issues were not resolved.

  • Non-farm payrolls rose by 196,000 in March, slightly better than economists were expecting. The unemployment rate was unchanged at 3.8%. 

  • Hourly wages ticked up only 0.1% for the month, reducing annualized wage gains to 3.2%. US jobless claims also declined to a 49-year low last week.

  • US bond yields all moved higher this week, particularly on the long end of the curve. The greenback was roughly unchanged for the week.

Across the pond this week:

  • Better-than-expected Chinese manufacturing data released early in the week eased global recession fears, and boosted global bond yields.

  • The Bank of Japan reported further erosion in business confidence, falling to a six year low in the first quarter. The yen sank 0.7% for the week.

  • Germany’s industrial orders posted another sharp pullback in February, the worst in more than two years. 

  • Yields on Japanese and German 10-year notes also moved higher this week, with German bund yields climbing back to zero.

EQUITY MARKETS

    TSX SECTORS
52-WK
    SPX SECTORS
52-WK

A sea of green in world equity markets this week. The Shanghai exchange was the best performer, rising over 8%.

In New York, the NYSE rose almost 2%, while the tech-heavy NASDAQ gained almost 3%. The S&P 500 Large Cap Index rose 2.1%, while the Dow Jones Industrial gained 1.9%. US markets were definitely in offensive mode this week, with only staples and utilities posting losses for the week.

In Toronto, the TSX also rose almost 2%. Discretionary, financial and energy stocks posted the biggest gains.

ENERGY SECTOR PERFORMANCE
TSX ENERGY SUBSECTORS
SPX ENERGY SUBSECTORS

The Canadian energy sector gained 3.4% for the week, while the SPX energy sector rose 2.2%. Gains were seen across all subsectors.

TSX ENERGY STOCKS
COMPANY TICKER CLOSE %CHG L 52WK H CHARTS
INTEGRATED
Suncor EnergySU44.50▲2.735.53
 
55.47D   W
Imperial OilIMO36.57▲0.233.52
 
44.91D   W
Husky EnergyHSE13.69▲3.313.21
 
22.99D   W
MIDSTREAM
EnbridgeENB49.50▲2.337.36
 
49.70D   W
TransCanadaTRP61.56▲2.647.90
 
61.63D   W
Pembina PipelinePPL50.20▲2.338.60
 
50.45D   W
Inter PipelineIPL21.93▼-0.818.60
 
25.66D   W
Keyera KEY31.64▲0.424.05
 
38.91D   W
Gibson EnergyGEI23.34▲1.616.15
 
23.75D   W
LARGE CAP E&P
Cdn Natural ResCNQ38.41▲4.730.11
 
49.08D   W
Cenovus EnergyCVE12.58▲8.48.74
 
14.84D   W
EncanaECA9.59▼-0.96.90
 
18.54D   W
TourmalineTOU20.76▲0.615.84
 
26.19D   W
Vermilion EnergyVET33.80▲2.526.67
 
49.67D   W
SERVICES
Pason SystemsPSI20.16▲3.417.18
 
24.57D   W
EnerflexEFX19.42▲1.713.55
 
20.38D   W
Mullen Group MTL12.25▲2.311.26
 
16.93D   W
ShawcorSCL21.19▲5.915.11
 
28.89D   W
Secure EnergySES8.60▲5.16.25
 
9.44D   W
REFINING & MARKETING
Parkland FuelPKI40.45▼-0.928.07
 
47.45D   W
S&P 500 ENERGY STOCKS
COMPANY TICKER CLOSE %CHG L 52WK H CHARTS
INTEGRATED
Exxon MobilXOM82.49▲2.164.65
 
87.36D   W
ChevronCVX126.42▲2.6100.22
 
131.08D   W
MIDSTREAM
Kinder MorganKMI20.05▲0.214.62
 
20.44D   W
Williams CoWMB29.11▲1.420.36
 
32.22D   W
ONEOKOKE70.54▲1.050.26
 
71.99D   W
LARGE CAP E&P
ConocoPhillipsCOP66.12▼-0.956.75
 
80.24D   W
EOG ResourcesEOG98.63▲3.682.04
 
133.53D   W
Occidental PetroOXY68.04▲2.856.83
 
87.67D   W
Anadarko PetroAPC47.01▲3.440.40
 
76.70D   W
Pioneer Natural ResPXD150.68▼-1.1119.08
 
213.40D   W
SERVICES
SchlumbergerSLB45.00▲3.334.99
 
75.43D   W
HalliburtonHAL30.97▲5.724.70
 
54.91D   W
Baker HughesBHGE26.78▼-3.420.09
 
37.76D   W
Ntl-Oilwell VarcoNOV28.20▲5.924.27
 
49.08D   W
TechnipFMCFTI25.18▲7.118.20
 
34.39D   W
REFINERS
Marathon PetroMPC63.47▲6.054.29
 
88.45D   W
Phillips 66PSX97.79▲2.878.44
 
123.97D   W
Valero EnergyVLO86.69▲2.268.81
 
126.98D   W
HollyFrontierHFC50.05▲1.646.75
 
83.28D   W
NYSE ADR ENERGY STOCKS
COMPANY TICKER CLOSE %CHG L 52WK H CHARTS
Royal Dutch ShellRDS.A64.52▲3.155.04
 
73.86D   W
TotalTOT56.73▲1.949.70
 
65.69D   W
BPBP44.53▲1.936.28
 
47.83D   W
EniE35.69▲1.329.75
 
40.15D   W
EquinorEQNR22.66▲3.119.95
 
28.93D   W
LATEST ENERGY NEWS
UPDATED: EVERY WEEKEND
SOURCES:
  • COMMODITY PRICES REFLECT NEAR MONTH CONTRACT FROM THE NYMEX/CME GROUP
  • EQUITY PRICES & SECTOR PERFORMANCE PROVIDED BY NYSE & TMX GROUP
  • FUTURES & OPTIONS CONTRACTS FROM ICE/CFTC (WEEKLY DATA FOR PREVIOUS TUESDAY)
  • CHARTPACKS COURTESY STOCKCHARTS.COM (DIVIDEND ADJUSTED)
  • NOTES:
  • CRB = THOMSON REUTERS/CORECOMMODITY CRB INDEX
  • C5+ = EDMONTON CONDENSATE
  • US BONDS = TLT = iSHARES 20+ YEAR TREASURY BOND ETF
  • CA BONDS = XBB = iSHARES CANADIAN UNIVERSE BOND INDEX ETF
  • SECTOR & SUBSECTOR PERFORMANCES WEIGHTED BY MARKET CAP
  • 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
  • Oil prices lock in 30% gain for the first quarter

    Oil prices lock in 30% gain for the first quarter

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