TSX futures lower as oil prices slip

June 8 (Reuters) - Futures for Canada’s main stock index fell on Friday as oil prices dropped on waning Chinese demand and soaring U.S. production, offsetting Venezuelan and Iranian supply worries and OPEC-led production cuts.

June futures on the S&P/TSX index were down 0.13 percent at 7:15 a.m. ET.

Housing starts data is due at 08:15 a.m. ET.

The Toronto Stock Exchange’s S&P/TSX rose 8.85 points, or 0.05 percent, to 16,192.78 points, on Thursday.

Dow Jones Industrial Average e-mini futures were down 0.54 percent at 7:15 a.m. ET, while S&P 500 e-mini futures were down 0.49 percent and Nasdaq 100 e-mini futures were down 0.98 percent.


Airbus SE is set to close a deal to take a controlling stake in Bombardier Inc’s CSeries jetliner program, effective July 1, the companies said, in a move expected to kickstart the European planemaker’s ability to put its marketing and cost-cutting muscle into the Canadian plane program.

Canada’s Senate on Thursday voted to legalize recreational marijuana, clearing a major hurdle that puts the country on track to become the first Group of Seven nation to permit national use of the drug.

Oil producer BP Plc complained to Canada’s National Energy Board (NEB) regulator about Enbridge Inc’s implementation and then abrupt reversal of new rules for shipping crude on its Mainline pipeline system, NEB documents showed on Thursday.


Bombardier: Desjardins raises price target to C$6 from C$4.75

Canadian Western Bank: Barclays raises target price to C$38 from C$37


Gold futures: $1302.9; fell 0.01 percent

US crude: $65.59; fell 0.55 percent

Brent crude: $76.61; fell 0.92 percent

LME 3-month copper: $7266; fell 0.9 percent


1000 Wholesale Inventories (y), R mm for April: Expected 0.0 pct; Prior 0.0 pct

1000 Wholesale sales mm for April: Expected 0.3 pct; Prior 0.3 pct

1030 ECRI Weekly Index: Prior 148.7

1030 ECRI weekly annualized: Prior 3.0 pct


Canadian markets directory ($1= C$1.30) (Reporting by Debanjan Bose in Bengaluru; Editing by Shailesh Kuber) 


Canadian Oil Has Record Day After Enbridge Scraps New Rules

By   and 
June 4, 2018, 1:05 PM CST Updated on June 5, 2018, 12:00 AM CST
    Enbridge drops plan to limit, verify shipments on mainline
    Producers have strong say in market participation: Auspice

Canadian crude surged by the most ever after Enbridge Inc. said it won’t implement a new procedure to stop shippers from claiming more space than they can use on a key pipeline linking Alberta’s oil sands with U.S. refineries.

Western Canadian Select jumped as much as $12.20 a barrel to $13.80 below the U.S. benchmark Monday, the narrowest spread since May 16. Canadian crudes have weakened to historically low levels in recent weeks as growing production overwhelms available pipeline capacity to transport Alberta’s supplies south of the border.


Canada’s biggest crude-export pipeline operator told shippers Monday that it won’t proceed with recently announced rules setting an allowance for the amount of crude companies could nominate for transport on its mainline. The move came after discussions with shippers, Enbridge said. 

"Producers have a strong say in how the market is going to be participated in,” Tim Pickering, chief investment officer at Auspice Capital Advisors Ltd., said in a phone interview from Calgary. The Enbridge turnabout shows that "the pipelines can’t just do changes that aren’t fair and are not conducive” to its customers.

The National Energy Board, Canada’s pipeline regulator, didn’t intervene on the Enbridge matter and received no complaints, spokeswoman Chantal Macleod said in an email.

In a notice last month, the company informed shippers that their volumes would be based on a 12-month rolling average, plus 15 percent for heavy crude and 40 percent for light crude and that the new rules applied to July shipments onward. Shippers who wished to send more than their allotted amount would have had to show physical proof of the volumes.

"Enbridge’s mainline system continues to be oversubscribed," Enbridge said in a statement. "We have been engaged with our customers to improve the nomination process and will continue to work directly with them on this issue."

— With assistance by Catherine Ngai

Exclusive: ConocoPhillips prepares to sell stake in Canada's Cenovus - sources

(Reuters) - ConocoPhillips (COP.N) is preparing to offload its stake in Cenovus Energy Inc (CVE.TO), which it acquired as part of an asset sale to the Canadian oil and gas producer last year, people familiar with the matter told Reuters.

The U.S. energy company has held discussions with investment banks about appointing advisers to the sale and could offer the shares to institutional investors as early as this month, said the people. They cautioned that the precise timing would depend on market conditions and could change.

If ConocoPhillips does not complete the sale in June or early July, it would then likely wait until September when institutional investors will have returned from their summer vacations, they added.

The ConocoPhillips stake in Cenovus is worth C$2.6 billion ($2 billion) based on its current share price but it would likely be sold at a small discount, the sources said. It would still be one of the biggest Canadian equity share sales this year.

ConocoPhillips has been actively selling assets and cutting costs in the past two years in order to cull debt and boost its dividend. It sold $17 billion in assets in 2017.

When Cenovus acquired oil sands and natural gas assets from ConocoPhillips for C$17 billion last year, it took 208 million shares of Cenovus, as well as C$14.1 billion of cash.

The deal made ConocoPhillips the biggest investor in the Calgary, Alberta-based company, although the U.S. oil giant has said it would not be a long-term holder of Cenovus equity.

ConocoPhillips and Cenovus declined to comment. The sources declined to be identified as the information is not public.

Shares of Cenovus extended their losses, to fall as much as 8.8 percent after the Reuters report. They closed down 5.7 percent at C$12.67 on Monday. The broader Canadian energy index was down 2.1 percent.

Cenovus shares have had a wild ride since the acquisition, declining as investors punished the stock over the deal, which was regarded as significantly stretching the Canadian company’s finances.

  • COP.N
  • CVE.TO
  • RDSa.L
  • CNQ.TO

While still down 27 percent since the deal was announced, they have been bouncing back of late on the back of an oil price CLc1 rebound. The stock is up 24 percent in the last three months.

The move follows a similar overnight stock sale by Royal Dutch Shell Plc (RDSa.L), which last month sold its entire stake in Canadian Natural Resources Ltd (CNQ.TO) for $3.3 billion.

At the time of the 2017 deal, ConocoPhillips valued its Cenovus stake at $9.41 per share based on Cenovus’ New York-listed stock. Since the May 17, 2017, transaction close, the share price has see-sawed above and below that value, although it has consistently traded higher since April 25.

While overnight trades tend to be discounted from current share price levels, in order to incentivize investors, Conoco would need Cenovus’ value to be at a point where it is making money even after the discount to make the sale worthwhile. If the same 2.9 percent reduction was applied from Shell’s overnight sale of Canadian Natural Resources shares, the Cenovus stock would need to be above $9.68 to generate a profit.


Conoco has also moved aggressively to get cash in other areas, including by seizing international assets controlled by Venezuelan state-controlled oil producer PDVSA.

Much of the fresh cash the company has raked in has gone back to shareholders, with the company’s dividend up about 8 percent in the first quarter to 28 cents and a plan to buy back $2 billion in shares this year.

Reporting by John Tilak in Toronto, David French in New York and Ernest Scheyder in Houston; additional reporting by Rod Nickel in Winnipeg; editing by Denny Thomas, Chizu Nomiyama and Jonathan Oatis

Oil falls 2 percent, U.S. crude hits lowest since early April

NEW YORK (Reuters) - Oil prices fell about 2 percent on Monday, with U.S. crude touching its lowest level in nearly two months, breaking below technical support levels as investors kept selling amid growing U.S. production, possible global supply growth and nagging trade tensions.

Brent crude futures LCOc1 lost $1.50 a barrel, or 2 percent, to settle at $75.29 a barrel. U.S. crude CLc1 ended $1.06, or 1.6 percent, lower at $64.75 a barrel, after earlier touching $64.57, its lowest since April 10.

“We are breaking key levels of support now,” said Phillip Streible, analyst at RJO Futures in Chicago. “Once we started taking out $65.50 or so, it really started to accelerate. People are not really believing that the rally will continue,” he said.

Both benchmarks were pressured by the expectation that the Organization of the Petroleum Exporting Countries (OPEC), which has led output cuts of about 1.8 million barrels per day (bpd) since January 2017, would soon boost output.

OPEC ministers from Saudi Arabia, the United Arab Emirates, Kuwait and Algeria, along with their counterpart from non-OPEC Oman, met unofficially in Kuwait on Saturday.

“It appears that some sellers may have delayed action ahead of the weekend and re-entered the short side after a meeting between the Saudis and the other Arab producers failed to offer additional insight,” Jim Ritterbusch, president of Ritterbusch and Associates said in a note.

OPEC meets formally on June 22. It is expected to agree to raise output to cool the market amid worries over Iranian and Venezuelan supply and after Washington raised concerns that the oil rally was going too far, OPEC sources familiar with the discussions told Reuters last month.

U.S. crude production climbed in March to 10.47 million bpd, a monthly record, the Energy Information Administration said last week.

“There’s been lot of talk about U.S. production continuing to rise. And it feels like once we hit Memorial Day, we hit a seasonal peak” for prices, which “ran up until the start of the summer season, and then hit a summer doldrums,” said RJO Futures’ Streible.

Last week, the week after Memorial Day, the U.S. crude contract lost about 3 percent after a decline of nearly 5 percent the previous week.

Data from market intelligence firm Genscape showed that between May 29 and June 1, crude inventories at the Cushing, Oklahoma, storage hub and delivery point for U.S. crude futures rose 210,046 barrels, a potentially bearish signal, traders who saw the data said.

“The trade tariffs between EU, Mexico, and Canada and the friction with China are also weighing on crude oil,” said Bill Baruch, president of Blue Line Futures in Chicago.

Mexico will join the European Union in seeking World Trade Organization involvement over U.S. tariffs on steel and aluminum, its economy ministry said.

Additional reporting by Christopher Johnson in London and Naveen Thukral in Singapore; Editing by David Gregorio and Marguerita Choy

CAD rises ahead of BoC interest rate decision as oil firms

* Canadian dollar at C$1.2990, or 76.98 U.S. cents * U.S. oil prices rise 0.4 percent * Bond prices lower across the yield curve TORONTO, May 30 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Wednesday, boosted ahead of a Bank of Canada interest rate decision by higher oil prices and broader declines for the greenback. The price of oil, one of Canada's major exports, was supported by tight supplies despite expectations OPEC and its allies will pump more in the second half of 2018 and helped by forecasts U.S. inventories fell. U.S. crude prices were up 0.40 percent at $67.00 a barrel. The U.S. dollar fell after reports that Italy's biggest party would make a renewed attempt to form a coalition government and end months of political turmoil helped the euro recover some recent lost ground. The Bank of Canada probably will hold interest rates steady as indebted consumers and uncertain trade policy necessitate caution, a Reuters poll predicted. The central bank's interest rate announcement is due at 10 a.m. EDT (1400 GMT). At 9:08 a.m. EDT (1308 GMT), the Canadian dollar was trading 0.2 percent higher at C$1.2990 to the greenback, or 76.98 U.S. cents. The currency traded in a range of C$1.2950 to C$1.3040. On Tuesday it touched its weakest in more than two months at C$1.3047. Canada's current account deficit widened to C$19.50 billion in the first quarter, the third largest ever, thanks to a growing international trade gap in goods, Statistics Canada said. In separate data, Canadian producer prices rose by 0.5 percent in April from March, the fourth consecutive increase, on higher prices for energy and petroleum products. Canadian government bond prices were lower across a steeper yield curve in sympathy with U.S. Treasuries. The two-year fell 7 Canadian cents to yield 1.883 percent and the 10-year declined 50 Canadian cents to yield 2.247 percent. On Tuesday, the 10-year yield touched its lowest since April 11 at 2.165 percent. (Reporting by Fergal Smith Editing by Bill Trott)


Rising oil prices bring hope to gloomy Canada sector

CALGARY, Alberta/VANCOUVER (Reuters) - Years of low oil prices and high costs spurred a stampede by multinational majors out of Canada’s oil sands last year, leaving the remaining crude producers struggling to weather painful drops in profit.

Environmentalists derided the “tar sands” as too dirty for investment, and analysts said the region’s high production costs made little sense in a world of $50-a-barrel oil.

But this month, global benchmark prices rebounded to $80 per barrel, cheering oil executives in the Canadian energy capital of Calgary, Alberta, who are shifting from survival mode to cautious expansion to capitalize on healthier cash flow expected this year.

Although most producers remain hesitant to commit substantial new capital, a few are restarting mothballed wells and many are penciling out tentative plans for their extra cash as investors brighten their outlooks for the sector.

Plunging output from heavy-crude competitor Venezuela - amid a sprawling crisis in its socialist government’s state-run oil firm, PDVSA - adds further opportunity for sales of Canadian crude to U.S. Gulf of Mexico refiners.

“It hurts on the downside, but boy is there opportunity on the way up,” said Ed LaFehr, chief executive of Baytex Energy Corp, which drills in Western Canada and Texas.

The improved prospects are already translating into job creation in an economy where the oil sands’ fortunes are so critical that the nation’s currency rises and falls in step with oil futures prices.

Matt Munro, Canada market manager for UK-based recruiter Petroplan, said the sector’s job postings have more than doubled so far this year compared with 2017 and salaries are up, particularly in oilfield services.

One company, for example, has boosted base salaries, before bonuses, from C$80,000 to C$110,000 in the past 18 months, Munro said. Average weekly salaries for oil and gas extraction workers in Alberta jumped 13.8 percent from February 2017 to February 2018, according to the most recent available data from Statistics Canada.

The number of people employed by Alberta resource companies, meanwhile, jumped 6.8 percent to nearly 106,000 in the same period, the data showed, though that is still well below the August 2014 peak of about 135,000 people.

(For a graphic on oil-and-gas employment and pay in Alberta, see: tmsnrt.rs/2s222V0 )

Baytex delayed starting production on three wells in the first quarter but now plans to launch the wells this spring, LaFehr said.

The company’s hedging strategy could prevent it from reaping the full upside of higher prices this year. But if prices hold it may see an extra C$200 million ($155.27 million) in free cash flow in 2019, which it could use to expand output and repay debt, LaFehr said.

Heavy oil producer BlackPearl Resources Inc shut down 10 wells in the first quarter that were not worth the expense of maintenance work at lower oil prices. Now it’s restarting them to capture profits from the rebound.

With U.S. benchmark West Texas Intermediate crude prices up 13 percent so far this year, BlackPearl CEO John Festival is mulling further expansion further next year.

“Higher prices certainly help the mood,” he said.

At current prices, BlackPearl might move more quickly to boost production at its Onion Lake, Saskatchewan project, which it had expected to expand by 6,000 barrels per day (bpd) in 2019, he said.

Beyond those tentative steps, Festival will hold back on more substantial investments to see if market dynamics can sustain higher prices.

“One month of good prices is not enough to cause us to commit,” Festival said.


The recent upturn by no means solves the structural problems in Canada’s sector that were exposed when global prices crashed starting in 2014 from a height of more than $100 a barrel.

Oil sands drilling costs remain high, and Western Canada is still producing far more oil than its congested pipelines can deliver. The oil-transport crisis is so severe, in fact, that many companies are shipping their oil one truckload at a time - at steep costs - for a lack of cheaper pipeline and rail options. 

On Tuesday, the Canadian government announced it would take the drastic step of purchasing the Trans Mountain pipeline from Kinder Morgan Canada Ltd in a bid to rescue an expansion project facing fierce opposition in British Columbia.

High transportation costs translate into deep discounts on Western Canadian oil, relative to the U.S. benchmark, with the gap reaching $30 a barrel in January, the biggest in four years. That has since narrowed to as little as $13, but the reduction is mainly due to oil producers taking more maintenance downtime earlier in the year than planned, reducing the strain on pipelines.

Even so, big Canadian producers that snapped up stakes from the retreating foreign owners during the downturn are well-positioned for any sustained rebound.

Rising prices have sparked “dramatic shift” in the cash-flow expectations for oil sands producers this year, equity analysts at Eight Capital said in a May report. The analysts raised share price targets of Canadian Natural Resources, Cenovus Energy and Suncor Energy.

Suncor and Canadian Natural may fare particularly well because they have secured enough pipe capacity for their current operations, both firms said last month.

Suncor also has space lined up for output from its stake in Fort Hills, the oil sands’ newest mine. For every $1 per barrel prices climb, Suncor’s cash flows rise by about $225 million.

Investors have noticed the reversal of fortune in the oil patch. The TSX Energy Index has gained 24 percent since its 2018 low in early February.

Higher oil prices make more regions, like the oil sands, considerations again for wary investors, said Trip Rodgers, portfolio manager at BP Capital Fund Advisors, which currently focuses upstream investments on U.S. shale producers.


“You’re able to look at names that may not be as low-cost.”

Higher prices are whetting appetites for more mergers and acquisitions, said Andrew Botterill, national oil and gas leader at Deloitte, which advises producers.

Even so, he said Canadian oil companies are more “mature” than they were before prices collapsed in recent years, and are likely to take a measured path to growth, he said.

Consultancy Wood Mackenzie estimates that Canada’s total capital spending in 2018 will drop 10 percent year-over-year as better prices take time to revive the industry, compared with a 15 percent spending increase in the United States.

Reporting by Rod Nickel in Calgary, Alberta and Julie Gordon in Vancouver; Editing by Simon Webb and Brian Thevenot



As clock ticks, doubts grow over Kinder Morgan's Canada oil pipe expansion

VANCOUVER/WINNIPEG, Manitoba (Reuters) - As a hard deadline set by Kinder Morgan Canada Ltd (KML.TO) for scrapping a key pipeline expansion looms, there is growing doubt among investors, contractors and government officials about reaching a deal to save the C$7.4 billion ($5.7 billion) project.

The company, a unit of Houston-based Kinder Morgan Inc (KMI.N), set a May 31 deadline to decide if it will proceed with the expanded line from Edmonton, Alberta to a port in the Vancouver area, which would give landlocked Canadian crude greater access to foreign markets.

Investors and project contractors are also increasingly pessimistic.

“I can’t walk out of my office or have a beer with someone where a conversation around this doesn’t occur,” said Rafi Tahmazian, senior portfolio manager at Canoe Financial, which manages shares of several Canadian oil producers.

“I’m worried - very worried - that (Kinder) will walk away.”

Kinder Morgan Canada declined to comment.

If Trans Mountain fails, it would be the third major Canadian export pipeline project to stall in two years, putting greater pressure on Canadian heavy crude prices that already trade at a discount to global prices LCOc1 due to limited transport.

Kinder Morgan set the deadline in part due to frustrations with delays caused by British Columbia government, which is concerned about possible oil spills.

  • KML.TO
  • KMI.N

Trudeau has publicly vowed to build the pipeline with or without Kinder, and offered to indemnify the company against losses related to B.C.’s delays.

KML’s share price has fallen 9.7 percent since early April, when the company halted all non-essential work, underperfoming a 5 percent rise in the benchmark Canada share index.

“We think the stock itself is pricing in a less than 25-percent chance of the project going ahead,” said Matthew Murphy, an analyst with investment bank Tudor, Pickering, Holt and Co.

Danny Mott, owner of Mott Electric, the electrical contractor on Trans Mountain, said he does not think the federal government has done enough to enforce its jurisdiction, nor to crack down on protesters who block access to Kinder Morgan work sites on a near-daily basis. 

“If we don’t have strong laws and the intent to follow through with them, I wouldn’t invest in that. I think I would walk away,” he said.

The project’s fate will create political ripples in Ottawa, where Justin Trudeau’s Liberals have promised the pipeline will be built one way or another, and sway investor confidence in Canada’s oil sands, which already produce far more oil than can move on pipelines.

Building more pipelines was a cornerstone of Trudeau’s energy policy. But the federal government is increasingly convinced that any assurances Ottawa gives Kinder Morgan will be rejected, said two sources with direct knowledge of the matter. They are not authorized to speak publicly.

Reporting by Julie Gordon in Vancouver and Rod Nickel in Winnipeg, Manitoba; Additional reporting by David Ljunggren in Ottawa; Editing by Lisa Shumaker


Valvoline To Acquire Great Canadian Oil Change

May 17 (Reuters) - Valvoline Inc:






Canadian dollar hits six-day low vs greenback amid NAFTA deadline doubts

TORONTO (Reuters) - The Canadian dollar hit a nearly one-week low against its U.S. counterpart on Tuesday as the greenback broadly rose and investors weighed prospects of a deadline being met for a new trade pact between Canada, the United States and Mexico.

Mexico’s economy minister said he saw diminishing chances for a new North American Free Trade Agreement ahead of a May 17 deadline to present a deal that could be signed by the current U.S. Congress.

Canada sends about 75 percent of its exports to the United States, so its economy could benefit if a NAFTA deal is reached.

“With NAFTA-on, NAFTA-off it places a bit more focus on the upcoming data that we have later this week and prospective tightening that is being priced into the curve,” said Mazen Issa, senior FX strategist at TD Securities.

Chances of a Bank of Canada interest rate hike at the bank’s next policy announcement on May 30 have climbed to about 50 percent from less than 25 percent at the beginning of the month. BOCWATCH.

The Bank of Canada appears to be losing sway in its own backyard as Canadian bond yields chase after rising U.S. interest rates even though Canadian policy makers have pledged to proceed slowly with rate hikes of their own.

The U.S. dollar .DXY rose against a basket of major currencies to the highest level since December, as data showing a pickup in U.S. consumer spending exerted fresh selling pressure on U.S. government bonds and sent the yield on the 10-year Treasury note to its highest level since July 2011.

At 5 p.m. EDT (2000 GMT), the Canadian dollar CAD=D4 was trading 0.5 percent lower at C$1.2877 to the greenback, or 77.66 U.S. cents. The currency hit its weakest level since Wednesday at C$1.2924.

The loonie retreated even as the price of oil, one of Canada’s major exports, rose to multi-year highs. U.S. crude oil futures CLc1 settled 0.5 percent higher at $71.31 a barrel.

Resales of Canadian homes fell 2.9 percent in April from March to the lowest level in more than five years, the Canadian Real Estate Association said.

Canadian government bond prices were lower across a steeper yield curve, with the two-year CA2YT=RR down 8.5 Canadian cents to yield 2.041 percent and the 10-year CA10YT=RR falling 51 Canadian cents to yield 2.484 percent.

The 10-year yield touched its highest intraday level since April 2014 at 2.521 percent.

Canadian inflation data for April is due on Friday.=

Reporting by Fergal Smith; Editing by Leslie Adler



Canadian govt to brief media on oil pipeline aid, no decision yet

OTTAWA, May 15 (Reuters) - Canadian Finance Minister Bill Morneau will brief reporters on Wednesday about talks with Kinder Morgan Canada on possible aid for an oil pipeline project but will not be announcing a final decision, a spokesman said on Tuesday.

Ottawa says it is prepared to offer financial support to ensure the company proceeds with a planned expansion of its Trans Mountain line from the Alberta oil sands to British Columbia. Kinder Morgan halted work last month, citing resistance from the British Columbia government.

Morneau is due to speak at 9 a.m. EDT (1300 GMT). (Reporting by David Ljunggren; Editing by Christian Schmollinger)



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