Stockwatch Energy today
Energy Summary for Oct. 19, 2022
2022-10-19 20:54 ET - Market Summary
by Stockwatch Business Reporter
West Texas Intermediate crude for November delivery added $2.74 to $85.55 on the New York Merc, while Brent for December added $2.38 to $92.41 (all figures in this para U.S.). Western Canadian Select traded at a discount of $25.75 to WTI, up from a discount of $26.50. Natural gas for November lost 29 cents to $5.46. The TSX energy index added 7.12 points to close at 243.39.
Oil prices headed higher as traders mulled the latest announcement from the White House about the U.S. Strategic Petroleum Reserve (SPR). As part of the effort to respond to what the U.S. government has dubbed "Putin's price hike at the pump" -- a reference to Russian President Vladimir Putin and the invasion of Ukraine, pushing fuel prices toward record highs -- the U.S. government is tapping the SPR for another 15 million barrels. It issued the notice of sale today for delivery in December.
"This sale will complete the historic, 180-million-barrel drawdown the President announced in the spring," continued the statement from the White House. No doubt with an eye on the imminent midterm elections, which are less than three weeks away, the statement went on to applaud the SPR sales for helping to "stabilize the crude oil markets and reduce prices at the pump." Hammering it home was a declaration that U.S. President Joe Biden stands "ready to move forward with significant SPR sales this winter, if needed," as part of his "commit[ment] to doing everything in his power to ... address the supply crunch and lower costs."
At some point, of course, a different concern will need addressing: The rapidly draining SPR is going to need replenishment. It currently sits at its lowest level in 38 years, at 405 million barrels (down from 640 million barrels when Mr. Biden took office, and from a peak of 726 million barrels in 2010). The White House previously (and vaguely) said in July that it would start restocking the SPR "in future years." Today's statement finally added some specifics. The government said it plans to buy oil for the SPR when prices are at or below $67 (U.S.) to $72 (U.S.) a barrel, more than $10 (U.S.) below current benchmark prices.
Here in Canada, oil sands giant Suncor Energy Inc. (SU) added 74 cents to $43.50 on 7.69 million shares. It is reportedly losing another high-profile executive. Martha Hall Findlay, a former Liberal member of Parliament who became Suncor's chief sustainability officer in 2020 and now serves as chief climate officer, told The Globe and Mail that she is retiring next month. While she is only three years into what she had planned to be at least a five-year stint at the company, she said she is leaving early for health reasons.
Ms. Hall Findlay will also step back from her work at the Pathways Alliance, a group of six oil sands companies, including Suncor, aiming for net zero emissions by 2050. Suncor was one of the founding members of the group in June, 2021, for which it has given Ms. Hall Findlay direct credit. In the Globe today, Ms. Hall Findlay vowed to keep "happily cheering them on from the sidelines."
The retirement comes at what Ms. Hall Findlay acknowledged to be an "interesting" time for Suncor. Notably, in July, president and chief executive officer Mark Little abruptly resigned after a worker died at one of Suncor's oil sands operations, the 13th fatality for the company since 2014. This occurred mere months after an activist investor, Elliot Investment Management, took aim at the company's safety record in April and called for an overhaul of its board, management and non-oil-sands operations. (They shook hands on a deal that saw three new directors added to the board in July. The CEO position remains unfilled, with downstream executive vice-president Kris Smith serving as interim CEO in the meantime.) More recently, two weeks ago, Suncor was in the news again after agreeing to sell its wind and solar assets to Canadian Utilities for $730-million.
Suncor has yet to comment on Ms. Hall Findlay's retirement. It may have more to say before the end of November, which according to the Globe will be her departure date. Arlene Strom, who has worked for Suncor since 2003 and currently serves as chief sustainability officer and general counsel, will reportedly take over Ms. Hall Findlay's responsibilities at the Pathways Alliance.
Suncor is not the only one keen to keep its green credentials nice and polished. Alberta Cardium player Bonterra Energy Corp. (BNE) added 14 cents to $8.25 on 225,300 shares, after hyping its "ongoing success with methane reduction programs." Bonterra is marking two years since the October, 2020, launch of a joint emission reduction program with Trido Energy Services, a private Calgary provider of technology and carbon credit management services. (The latter means that it helps companies with carbon credit documentation, registration, auditing, and selling or trading.) By Bonterra's estimates, the program will reduce emissions by 26,000 tonnes of carbon dioxide equivalent annually, "the equivalent of planting approximately 429,912 tree seedlings."
Despite the hype -- which, naturally, contained no mention of how much the cost of the new Trido equipment or the carbon credit services rendered -- investors mostly yawned. This was not necessarily what they hoped to see as Bonterra's very first press release since getting a new CEO last month. Effective Sept. 6, Patrick Oliver took over from founder and long-time CEO George Fink, who retired at age 82. He remains a director and major shareholder. While there have been plenty of rumours about what Mr. Oliver's tenure could bring, from the revival of a dividend to a potentially ambitious shopping spree, he has stayed mum. Investors will perhaps learn more when the company releases its next quarterly financials on Nov. 8.
© 2022 Canjex Publishing Ltd. All rights reserved.