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CANADA STOCKS-TSX extends losses as oil slides, investors brace for U.S. rate hike

March 19 (Reuters) - Canada’s main stock index fell on Monday, led by the energy sector as oil prices slipped, and investors were cautious ahead of a near-certain U.S. interest rate hike this week.

* At 12:29 p.m. ET (1629 GMT), the Toronto Stock Exchange’s S&P/TSX Composite Index fell 123.05 points, or 0.78 percent, to 15,588.28.

 

* Oil prices slipped on Monday as energy market investors remained wary of growing crude supply, although tensions between Saudi Arabia and Iran gave prices some support.

 

* The Dow Jones Industrial Average lost nearly 400 points as investors awaited the U.S. Federal Reserve’s two-day policy meeting, which concludes on Wednesday.

* Canadian tech stocks were lower on Monday, tracking a deep selloff in U.S. tech sector after Facebook fell 7.7 percent following reports of data misuse.

* The TSX posted no new 52-week highs and 4 new lows. Across all Canadian issues there were 8 new 52-week highs and 15 new lows.

* The largest percentage gainer on the TSX was Novagold , which rose 9.0 percent, while the largest decliner was B2gold Corp, down 5.3 percent.

* Among the most active Canadian stocks by volume were Neovasc Inc, down 5.7 percent at $0.17; Aurora Cannabis, up 0.3 percent at $10.98 and Klondex Mines , up 61.1 percent at $2.90.

 

* Gold miner Klondex was up after U.S. miner Hecla Mining Co said it would buy the company in a $462 mln cash-and-stock deal.

* Volume on the TSX index was 82.07 million shares, while total volume on Monday was 139.28 million shares. (Reporting by Ankur Banerjee and Medha Singh in Bengaluru Editing by Saumyadeb Chakrabarty)

SOURCE: REUTERS

Oil prices fall as increased U.S. drilling activity points to higher output

* U.S. rig count rises back to 800 - Baker Hughes

* Rising drilling activity points to higher crude production

* Middle East tensions prevent further price falls

 

By Henning Gloystein

SINGAPORE, March 19 (Reuters) - Oil prices fell on Monday as rising drilling activity in the United States pointed to further increases in output, raising concerns about a return of oversupply.

 

U.S. West Texas Intermediate (WTI) crude futures were at $62.02 a barrel at 0145 GMT, down 32 cents, or 0.5 percent, from their previous close.

Brent crude futures were at $65.87 per barrel, down 34 cents, or 0.5 percent.

Monday’s price falls in part reversed increases last Friday, which came on the back of concerns over rising tension in the Middle East.

“Despite all the bearish U.S. shale supply headlines, oil prices remain firm as... the odds that the U.S. will pull out of the Iran nuclear agreement continue to run very high,” said Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA in Singapore.

On a simple supply versus demand basis, however, global oil markets are facing the risk of returning into oversupply after being in a slight deficit for much of last year.

U.S. drillers added four oil rigs in the week to March 16, bringing the total count to 800, the weekly Baker Hughes drilling report said on Friday.

The U.S. rig count, an early indicator of future output, is much higher than a year ago when 631 rigs were active as energy companies have continued to boost spending since mid-2016 when crude prices began recovering from a two-year crash.

Thanks to the high drilling activity, U.S. crude oil production C-OUT-T-EIA has risen by more than a fifth since mid-2016, to 10.38 million barrels per day (bpd), pushing it past top exporter Saudi Arabia.

 

Only Russia produces more, at around 11 million bpd, although U.S. output is expected to overtake Russia’s later this year as well.

Soaring U.S. output, as well as rising output in Canada and Brazil, is undermining efforts by the Middle East dominated Organization of the Petroleum Exporting Countries (OPEC) to curb supplies and bolster prices.

Many analysts expect global oil markets to flip from slight undersupply in 2017 and early this year into oversupply later in 2018.

Reporting by Henning Gloystein; editing by Richard Pullin

SOURCE: REUTERS

CANADA STOCKS-TSX advances as oil price lifts energy shares

March 16 (Reuters) - Canada’s main stock index rose on Friday, boosted by the heavyweight energy sector as shares of oil companies were lifted by the higher price of crude.

 * At 10:34 a.m. ET (14:34 GMT), the Toronto Stock Exchange’s S&P/TSX composite index rose 93.44 points, or 0.6 percent, to 15,764.06.

* The TSX posted 7 new 52-week highs and 2 new lows. Across all Canadian issues there were 43 new 52-week highs and 10 new lows.

* The largest percentage gainer on the TSX was Ivanhoe Mines Ltd, which rose 6.3 percent, while the largest decliner was Novagold, down 2.9 percent.

* Among the most active Canadian stocks by volume were Enbridge Inc, up 2.4 percent at C$42.03; Manulife Financial, up 1.3 percent at C$24.69 and Bombardier , unchanged at C$3.72.

* In the energy sector, Suncor Energy added 1 percent to C$42.69.

* The price of U.S. crude oil gained 0.18 percent to $61.30. (Reporting by John Tilak and Leah Schnurr Editing by Phil Berlowitz)

SOURCE: REUTERS

Oil Sands Upgraders May Make a Comeback Amid Pipeline Crisis

  • Alberta pledges C$1 billion of support for partial upgrading
  • Partial upgraders seen freeing up space on clogged pipelines

Turning Canada’s heavy oil sands into a more marketable kind of crude is making a comeback, or rather half a comeback.

 
 

Alberta’s government’s C$1 billion dollar pledge ($780 million) will help support the construction of smaller and cheaper varieties of upgraders. The so-called partial upgraders would process the sticky oil just enough so that it can flow freely through pipelines without adding ultra-light condensate. The government expects that as many as five private investors will infuse about C$5 billion in the sector.

 
 

Interest in building full upgraders dwindled prior to the 2014 downturn in oil prices amid soaring costs and as the U.S. fracking boom sent a surge of light oil onto the market, depressing prices for similar synthetic crude. The older versions were refinery-sized plants that would cost billions of dollars to build today. The partial upgraders are cheaper, and would produce a grade that’s easier to refine and transport without the need for more-expensive diluent.

 
 

“Partial upgrading does part of the job and gets part of the benefit,” Kent Fellows, a research associate at the School of Public Policy and one of the report’s authors. “Its a much-less intensive process and a much less costly process.”

 
 

Since partial upgrading would reduce or eliminate the need for the condensate that makes up about a third of the heavy oil-sands crude, it would free up pipeline space and produce a grade of oil that’s easier to refine and more valuable than the heavy grades produced currently, Fellows said.

Commercial Basis

Nexen Energy Ulc shut its Long Lake facility after a fatal accident, while Suncor Energy Inc. abandoned plans to build a new upgrader five years ago amid surging costs. The lack of additional upgraders worsened a glut in the domestic market amid rising production. Heavy Canadian crude traded at its biggest discount in more than four years to U.S. benchmark West Texas Intermediate oil futures last month as pipelines filled up.

The new upgraders aren’t yet operating on a commercial basis and more than ten technologies are being tested or developed, according to a report by the University of Calgary’s School of Public Policy. Calgary-based MEG Energy Corp. is currently constructing 3,000 barrel-a-day commercial demonstration of a partial upgrader using so-called Hi-Q technology, Davis Sheremata, a spokesman for MEG, said in an email. The work will take 18 to 24 months but the pace of construction depends on financing, he said.

A 100,000 barrel-a-day partial upgrader could raise the value of a barrel of bitumen by $10 to $15 by converting it into a heavy or medium grade of crude oil, according to Fellows’ report. That’s equal to between $33 and $38 a barrel at current bitumen prices versus $35 a barrel for heavy Western Canadian Select, an oil-sands benchmark, data compiled by Bloomberg show.

Chump Change

A 100,000 barrel-a-day plant would include a solvent de-asphalter and hydrotreater and cost about $3 billion to construct, Fellows’ report said. That’s about a quarter the cost of Suncor’s Voyageur upgrader before it was canceled in 2013.

MEG “will be watching for more details on how the Alberta Government plans to implement this program” to fund partial upgrading, spokesman Sheremata said.

FluidOil Corp., a U.K.-based company, is working with a Canadian producer on a project to build a 1,000 barrel-a-day partial upgrader, Charles Parker, the company’s chief executive officer, said in a phone call. Parker declined to reveal his partner but said the company produces more than 100,000 barrels a day and is among the five largest.

The aide for partial upgrading, in the form of loan guarantees and grants, is part of a billintroduced to the legislature last week that also includes another C$1 billion for petrochemical projects.

Alberta’s financial support may jump start this fledgling technology, Fellows said. “I have no idea if a billion is the right amount to make this go forward,” he said. “It’s not chump change.”

SOURCE: BLOOMBERG

CANADA STOCKS-TSX futures little changed while oil prices dip

March 12 (Reuters) - Stock futures pointed to a flat opening for Canada’s main stock index on Monday even as oil prices slipped on rising U.S. output.

March futures on the S&P TSX index were up 0.01 percent at 7:15 a.m. ET.

Canada’s main stock index closed higher on Friday, lifted by strong gains in oil and metals prices.

Dow Jones Industrial Average e-mini futures were up 0.37 percent at 7:15 a.m. ET, while S&P 500 e-mini futures were up 0.31 percent and Nasdaq 100 e-mini futures were up 0.56 percent.

TOP STORIES

Thomson Reuters Corp is to track and analyse chatter about bitcoin on hundreds of news and social media websites to help investors looking for an edge in trading the world’s biggest cryptocurrency, the company said.

There are parallels between the way companies in North America and Britain are holding back on investment as they wait for clarity on the re-negotiation of NAFTA and the outcome of talks on a Brexit deal, Canada’s finance minister said. 

Taking a page from its aggressive growth strategy in the United States, cash-rich Canadian fertilizer giant Nutrien Ltd plans to plow investment into Brazil in a bid to reap up to 30 percent of farm supply sales in fertile pockets of the country.

Britain has thrown financial support for the first time behind exports of Bombardier CSeries jets part-built by Northern Ireland workers caught up in a recent trade row.

A temporary exemption from U.S. tariffs is little comfort to the Canadian steel city of Hamilton, coping with months of uncertainty as U.S. President Donald Trump has threatened a potentially devastating 25 percent duty unless the North American Free Trade Agreement is renegotiated.

ANALYST RESEARCH HIGHLIGHTS

Total Energy Services Inc: BMO cuts target price to C$16 from C$17

Detour Gold Corp: Raymond James cuts target price to C$20 from C$21

COMMODITIES AT 7:15 a.m. ET

Gold futures: $1317.2; -0.51 percent

US crude: $61.8; -0.39 percent

Brent crude: $65.15; -0.52 percent

LME 3-month copper: $6902; -0.86 percent

SOURCE: REUTERS

Oil prices edge up on weak dollar ahead of U.S. inventory data

NEW YORK (Reuters) - Oil prices rose on Tuesday, supported by a weaker dollar but U.S. crude’s gains were limited by expectations for a weekly rise in U.S. crude stockpiles.

Brent crude LCOc1 futures rose 25 cents to settle at $65.79 a barrel, a 0.4 percent gain. Brent reached a low of $65.30 a barrel and a six-day high of $66.16 a barrel during the session.

West Texas Intermediate (WTI) crude CLc1 futures rose 3 cents to settle at $62.60 a barrel. WTI notched its own six-day high at $63.28 a barrel.

Oil prices fell in post-settlement trade after data from the American Petroleum Institute showed U.S. crude inventories rose by 5.7 million barrels last week, a bigger-than-expected rise.

Oil drew support as the U.S. dollar fell to its lowest in more than a week against a basket of currencies on news from South Korea that North Korea was willing to hold talks with the United States on denuclearization, and would suspend nuclear tests during any discussions.

South Korea also said it would hold a summit with North Korea for the first time in more than a decade.

The news led investors to sell the U.S. dollar and instead buy riskier assets such as commodities.

The dollar index last was down by half a percent. A weaker greenback makes dollar-denominated commodities cheaper for holders of other currencies.

“If you reduce geopolitical risk in the world, it might be a better place to do business and that could be bullish,” said Phil Flynn, analyst at Price Futures Group in Chicago.

U.S. oil prices were under pressure from expectations that weekly crude inventory data from the U.S. government, due on Wednesday, would show a second straight rise.

Analysts polled by Reuters ahead of the data on average expect U.S. crude stocks rose by 2.7 million barrels in the week ended March 2.

Inventories are rising during the seasonal maintenance period for refineries, when shutdowns mean they need less crude.

A surge in U.S. crude production to more than 10 million barrels per day (bpd) has helped the country overtake top exporter Saudi Arabia.

Output hit a record 10.057 million bpd in November, according to the U.S. Department of Energy.

The U.S. Energy Information Administration said in a monthly report it expected fourth-quarter U.S. crude output to reach an average of 11.17 million bpd, up from its forecast a month ago of 11.04 million bpd.

 

The continued growth of U.S. shale has been a theme at the CERAWeek conference in Houston this week, said John Kilduff, partner at investment manager Again Capital in New York.

Brent had dipped closer to $65 in earlier trading, pressured by the International Energy Agency’s (IEA) warning on Monday that U.S. oil output was set to surge over the coming five years.

The prospect of the Organization of the Petroleum Exporting Countries and non-member producers, including Russia, maintaining crude output cuts in the face of a boom in U.S. shale production helped lift Brent back above $65 a barrel this week.

April U.S. gasoline futures RBc1 rose as much as 0.50 percent to hit $1.9443 a gallon, the highest since Jan. 30, before retreating.

Additional reporting by Amanda Cooper in London and Jane Chung in Seoul; Editing by David Gregorio, Andrea Ricci and Richard Chang

SOURCE: REUTERS

 

Husky, Stung by Canada Oil Crash, Gets Relief From U.S. Tax Cuts

The decline in cash flow from heavy Canadian crude was partially offset as the refineries in Ohio and Wisconsin benefited from the cheaper grade, Robert Peabody, chief executive officer, said in a conference call Thursday. As earnings shifted from Canada to the U.S. refineries, the reduction in company’s tax burden in the U.S. helped boost income, he said.

Husky, which produces oil in Alberta and Saskatchewan and operates refineries in the U.S. and Canada, reported fourth quarter free-cash flow rose 8.5 percent versus a year earlier. Heavy Western Canadian Select’s discount to U.S. benchmark West Texas Intermediate grew to more than $30 a barrel last month from about $15 in mid November. The discount traded just under $25 a barrel on Thursday versus an average of about $13 a barrel all of last year.

 

SOURCE: BLOOMBERG

UPDATE 3-Canadian Natural Resources slows heavy oil output over steep price discount

March 1 (Reuters) - Oil and gas producer Canadian Natural Resources Ltd said on Thursday it will slow its output of heavy crude due to a steep price discount tied to tight transportation capacity from the landlocked Alberta province.

CNRL, one of Canada’s largest heavy oil and gas producers, is delaying the completion and production ramp-up of some wells that produce heavy oil, President Tim McKay said on a conference call with analysts.

“Although oil is moving, the (price) differentials are behaving as if the oil can’t move,” McKay said.

The company is also considering reducing its heavy oil drilling program in the second half, and switching to more light oil drilling, McKay said.

In an interview, McKay said he expects the cumulative effect of slowing heavy output from new wells and advancing the timing of planned outages at some production sites will be“quite minor” for overall production.

“We look at the differentials all the time and our ability to start and stop our drilling program, based on what’s going on with the commodities,” he said.

Earlier on Thursday, CNRL’s fourth-quarter profit beat estimates, boosted by higher oil production and higher prices.

The company’s Toronto-listed shares were up 65 Canadian cents, or 1.6 percent, to C$40.40.

Alberta oil producers have struggled to move crude to U.S. refineries due to strained pipeline and rail capacity, leading to a bigger-than-usual discount on Canadian heavy crude, called Western Canada Select (WCS), compared to U.S. benchmark West Texas Intermediate (WTI) light oil.

Heavy crude must be diluted to move through pipelines, adding cost.

CNRL’s heavy oil output was 1 percent higher during the fourth quarter than the preceding quarter. The company expanded its Horizon oil sands site last year.

WCS heavy crude was trading on Thursday at $24.70 per barrel below WTI, according to Shorcan Energy Brokers data.

The Alberta government on Wednesday estimated that the higher-than-usual differential was costing heavy oil producers C$30 million to C$40 million in revenue per day.

 

Overall daily production during the quarter rose 19 percent to 1 million barrels of oil equivalent per day (boe/d).

The company’s net income fell to C$396 million ($308.17 million), or 32 Canadian cents per share, in the fourth quarter, from C$566 million, or 51 Canadian cents per share, a year earlier.

Excluding items, the company earned 46 Canadian cents per share, beating analysts’ average estimate of 36 Canadian cents, according to Thomson Reuters I/B/E/S. ($1 = C$1.29) (Reporting by Rod Nickel in Winnipeg, Manitoba, Karan Nagarkatti and Anirban Paul in Bengaluru; editing by Shounak Dasgupta, Will Dunham and David Gregorio)

 

SOURCE: REUTERS

Oil falls for third day as higher inventories, dollar weigh

LONDON (Reuters) – Oil fell for a third day on Thursday, dropping toward $64 a barrel as rising U.S. inventories, record output and a stronger dollar outweighed high OPEC compliance with its supply-cutting deal.

A U.S. government report on Wednesday showed a larger-than-expected increase in U.S. crude inventories and a rise in gasoline stocks. U.S. crude output reached a record in November, although it slipped in the last month of 2017.

Brent crude, the global benchmark, was down 51 cents at $64.22 a barrel at 1420 GMT. U.S. crude fell 36 cents to $61.28.

U.S. crude output hit an all-time high of 10.057 million barrels per day (bpd) in November before falling slightly in December, the government said, but weekly data showed another record and further gains are expected.

“Weekly figures suggest the upward trend will resume in January and February and the old records are likely to be smashed,” said Tamas Varga of oil broker PVM.

The rise in U.S. output in recent weeks has been overshadowing supply curbs by other producers, led by the Organization of the Petroleum Exporting Countries and Russia.

OPEC officials will meet U.S. shale executives at a U.S. energy conference on Monday, a gathering that underlines the influence of American output in keeping a lid on global prices.

“The standoff ‘shale versus sheikh’ continues to frame the oil market, with the former again gaining the upper hand,” said Norbert Ruecker, head of macro and commodity research at Julius Baer. “We see more downside for oil.”

Oil also fell due to a stronger dollar, which makes commodities denominated in the U.S. currency more expensive for holders of other currencies. The dollar index hit a six-week high on Thursday.

OPEC’s cut, which began a year ago, has nonetheless helped to boost prices from levels below $30 seen in January 2016. Producers are sticking to the deal and an involuntary drop in Venezuelan output has further boosted compliance.

A Reuters survey on Wednesday found OPEC production fell in February to a 10-month low.

For now though, the gains in U.S. supply are prevailing in shaping sentiment in the oil market, other analysts said.

“Despite the expanding output curbs by OPEC and non-OPEC members such as Russia, the market has been focusing more on rising U.S. output since around late January,” said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo.

 

SOURCE: REUTERS

Oil markets mixed on lower Canadian flows, firmer dollar

SINGAPORE, Feb 20 (Reuters) - Oil markets were split on Tuesday, with U.S. crude pushed up by reduced flows from Canada while international Brent prices eased.

U.S. West Texas Intermediate (WTI) crude futures were at $62.16 a barrel at 0153 GMT, up 48 cents, or 0.8 percent, from their last settlement.

Traders said the higher WTI prices were a result of reduced flows from Canada’s Keystone pipeline, which has been operating below capacity since late last year due to a leak, cutting Canadian supplies into the United States.

Outside North America, Brent crude eased on the back of a dip in Asian stocks and a stronger dollar, which potentially curbs demand as it makes fuel more expensive for countries using other currencies domestically.

Brent crude futures were at $65.23 per barrel, down 44 cents, or 0.7 percent, from their last close.

Despite this, oil markets remain well supported due to supply restraint by the Organization of the Petroleum Exporting Countries (OPEC), which started last year in order to draw down excess global inventories.

OPEC Secretary-General Mohammad Barkindo said on Monday the organisation registered 133 percent compliance with agreed output reduction targets in January.

Barkindo said compliance last year stood at 107 percent.

Global oil demand for 2018 is estimated to grow 1.6 million barrels per day due to an “encouraging environment”, Barkindo added.

“OPEC and Russia continue to support the production cuts that are due to expire at the end of this year, and they assure markets that there will be an orderly ramp up of production once the cuts expire,” said William O‘Loughlin, investment analyst at Australia’s Rivkin Securities.

While most of OPEC, especially its de-facto leader Saudi Arabia, is showing strong support for the production restraint, non-OPEC producer Russia has shown signs it may at some stage gradually start to increase output again.

Saudi Arabia - not least in an attempt to give the planned listing of its state-owned oil giant Saudi Aramco - a boost, is keen for Russia and other producers to keep withholding supplies to prop up prices.

But soaring U.S. production is threatening to erode OPEC’s efforts.

Last week, the amount of U.S. oil rigs drilling for new production rose for a fourth straight week to 798, in an indication that U.S. crude output C-OUT-T-EIA, already at a record 10.27 million bpd, may rise further.

The United States late last year became the world’s second biggest oil producers, only slightly behind Russia and ahead of top exporter Saudi Arabia. (Reporting by Henning Gloystein Editing by Joseph Radford)

SOURCE: REUTERS

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