Energy Summary
Energy Summary
2019-11-26 20:21 ET - Market Summary
by Stockwatch Business Reporter
West Texas Intermediate crude for January delivery added 40 cents to $58.41 on the New York Merc, while Brent for January added 62 cents to $64.27 (all figures in this para U.S.). Western Canadian Select traded at a discount of $19.15 to WTI, unchanged. Natural gas for December lost six cents to $2.47. The TSX energy index lost 1.78 points to close at 132.47.
A week after being announced, the CN Rail strike is almost over. Teamsters Canada announced today that it has reached a tentative deal to renew a collective agreement for more than 3,000 conductors and other railway employees. Normal operations at CN are set to resume tomorrow morning, which will end an eight-day-long strike that disrupted industries across Canada, in some cases causing layoffs and millions of dollars worth of backlogged shipments. The agricultural and mining sectors have been particularly affected by the strike. Concerned eyebrows were also raised in the oil patch, due to the industry's increasing reliance on crude-by-rail shipments. While the full economic damage has not been calculated, the strike is already having one measurable effect on the oil industry, at least in Alberta: Today, the Alberta government, which has been gradually easing its mandated curtailments on crude production on a month-by-month basis, cited the strike as one of the reasons why there will be no easing in January. The provincial limit will remain 3.81 million barrels a day, same as December.
Meanwhile, oil observers worldwide are placing bets on the outcome of next week's OPEC meeting and the fate of the soon-to-expire OPEC+ production-cutting pact (with the "plus" referring to non-OPEC countries that have joined the pact, particularly Russia). The cartel will meet at its Viennese headquarters on Thursday, Dec. 5, which will mark roughly the third anniversary since the pact was officially announced in late 2016. The original term of the pact was six months. OPEC+ has extended the pact several times since then, with the current version set to expire this March.
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Back in Canada, oil sands producer Cenovus Energy Inc. (CVE) stayed unchanged at $12.10 on 4.47 million shares. It got several glowing mentions yesterday in a press release from IBM, which announced that Cenovus, "a leading Canadian integrated oil and gas company," has chosen IBM to implement new digital systems that will help "further [its] position as the industry-leading oil sands operator." Cenovus did not put out its own press release about the arrangement, but surely appreciated being showered with compliments. At the heart of the arrangement is the new SAP (systems, applications and products) platform of software that IBM will roll out across Cenovus's entire organization.......................
"A company enjoying insider buying is the Alberta Cardium-focused Yangarra Resources Ltd. (YGR), down two cents to $1.06. The company has drifted dangerously close to sub-$1 territory a few times this month."
"Yangarra announced at the end of last month that it would hike its 2019 budget by $10-million (to $110-million) in order to drill an extra handful of wells during the fourth quarter."
"Insiders have been taking the dip as a buying opportunity. Since the start of the month, three directors and officers have spent a total of $284,064 buying 193,000 shares. The busiest buyer was Gurdeep Gill, Yangarra's vice-president of business development, who bought 122,300 shares, including 40,000 this week. Mr. Gill joined Yangarra a little over a year ago, in August, 2018, after spending about 18 years in investment banking and the capital markets. He was most recently the head of investment banking at AltaCorp Capital."
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Far to the south (in geography and share price), Jose and Alejandro Penafiel's Argentina-focused Centaurus Energy Inc. (CTA) stayed unchanged at 7.5 cents on 3,800 shares. It lost two cents yesterday after releasing its third quarter financials. Much of the relevant information was already released on Oct. 17, when Centaurus (then Madalena Energy; its name change took effect Oct. 30) provided an operational update and pegged its third quarter production at around 2,200 barrels of oil equivalent a day. (The actual figure announced yesterday was 2,142 barrels a day.) Centaurus also glumly confirmed on Oct. 17 that its realized sales prices had plunged to about $39 (U.S.) a barrel in the third quarter from $49 (U.S.) a barrel in the second quarter, reflecting political turmoil in Argentina (more on that in a moment). All of this was rehashed in yesterday's financials. Where there was new information, it was generally worrisome. Notably, Centaurus has been informed by the government of its core operating province, Neuquen, that it has been lax in meeting its work commitments at its 90-per-cent-owned, non-producing Curamhuele block. The company is now trying to renegotiate the timing of these commitments. If it fails in its negotiations, or fails to meet the commitments, the block could be taken away and Centaurus would be left on the hook for about $8-million (U.S.) in investment obligations.