Oil Field News

C$ steadies as oil and stocks rally

* Canadian dollar at C$1.2590, or 79.43 U.S. cents * Price of U.S. crude oil rises 1.8 percent * Bond prices mixed across flatter yield curve TORONTO, Feb 12 (Reuters) - The Canadian dollar steadied on Monday against its U.S. counterpart after hitting a six-week low at the end of last week, helped by higher oil and stock prices. At 9:49 a.m. EST (1449 GMT), the Canadian dollar was trading 0.1 percent lower at C$1.2590 to the greenback, or 79.43 U.S. cents. The currency traded in a range of C$1.2556 to C$1.2607. On Friday, it touched its weakest since Dec. 27 at C$1.2690 after domestic data showed the biggest decline in jobs since January 2009. The price of oil, one of Canada's major exports, recovered some of last week's steep losses as global equities steadied after their largest one-week slide in two years. U.S. crude prices were up 1.8 percent at $60.25 a barrel. Commodity-linked currencies, such as the Canadian dollar tend to underperform when stocks fall. The loonie retreated 1.2 percent last week. Still, speculators raised bullish bets on the Canadian dollar for the fifth straight week, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed on Friday. As of Feb. 6, net long positions had risen to 40,164 contracts from 33,465 a week earlier. Canadian government bond prices were mixed on Monday across a flatter yield curve, with the two-year down 1.5 Canadian cents to yield 1.796 percent and the 10-year rising 1 Canadian cent to yield 2.351 percent. The Canadian Real Estate Association will release its monthly home sales report on Thursday. Canada's manufacturing sales report for December is due on Friday. (Reporting by Fergal Smith; Editing by Nick Zieminski)

SOURCE: REUTERS

Public Offering of Oil & Gas Totals $65 Million for 2017-18 Year

There's a bit of optimism in the energy sector as it was announced that the February public offering of Crown petroleum and natural gas rights generated $3 million. This number pushed the totals for the 2017-18 fiscal year to $65 million surpassing last year's total of $50 million. 

"We're pretty steady over the last four to five years from year to year," explained Paul Mahnic, Executive Director Lands and Mineral Tenure Branch, "which isn't bad. It does get you through the highs and the lows of the price in oil. For us, it does indicate that the industry is still interested in Saskatchewan. It's definitely encouraging. "

He added that the southeast continues to be a focus with 52 leases generating over $2.4 million. 

"From our perspective, it seems that it's likely the Mississippian that is drawing the interest. From year to year, decade to decade the Mississippian Midale Frobisher are always relatively economical for industry. That's a good sign as well, it's not just a boom and bust."

"The fiscal year total is definitely encouraging. You're going to have fluctuation for sale to sale based on industry's budget cycle as well. It may look a little choppy when you look sale to sale but overall it's encouraging."

The next public offering for Crown rights will be on April 10. 

CAD hits near three-week low as stocks, oil slide

* Canadian dollar at C$1.2524, or 79.85 U.S. cents * Loonie touches weakest level since Jan. 17 at C$1.2533 * Oil prices fall nearly 2 percent * Bond prices rally across the yield curve By Fergal Smith TORONTO, Feb 5 (Reuters)

The Canadian dollar dropped to a nearly three-week low against its U.S. counterpart on Monday as a selloff in equity markets continued and oil prices fell, while investors weighed prospects for further Bank of Canada interest rate hikes. At 4 p.m. EST (2100 GMT), the Canadian dollar was trading 0.7 percent lower at C$1.2524 to the greenback, or 79.85 U.S. cents. The currency's strongest level of the session was C$1.2398, while it touched its weakest since Jan. 17 at C$1.2533.

"A lot of good news is in the cake at this point for CAD," said Mazen Issa, senior FX strategist at TD Securities. "The market, we think, is too optimistic on the ability of the central bank to deliver more tightening."

Bank of Canada Senior Deputy Governor Carolyn Wilkins will speak on Thursday, which could offer the next clues on the outlook for interest rates. The central bank hiked last month for the third time since July. Money markets expect two further rate increases this year.

The U.S. dollar rose against a basket of major currencies as U.S. bond yields rallied on safe-haven demand stemming from a dramatic selloff on Wall Street, where the Dow Jones at one point fell more than 1,500 points. Commodity-linked currencies, such as the Canadian dollar, tend to underperform when stocks fall, because of the signal that it sends on prospects for global economic growth. The price of oil, one of Canada's major exports, fell as rising U.S. output and a weaker physical market added to the pressure from a widespread decline across equities and commodities. U.S. crude oil futures settled nearly 2 percent lower at $64.15 a barrel.

Canada's trade data for December is due on Tuesday and the January employment report is due on Friday. The country is coming off its best year for job growth since 2002 and economists will look to see whether the job market remains strong enough to support further interest rate hikes. Canadian government bond prices were higher across the yield curve, with the two-year up 12.5 Canadian cents to yield 1.789 percent and the 10-year rising 53 Canadian cents to yield 2.294 percent. The 10-year yield touched its highest intraday level since May 2014 at 2.393 percent.

Canada will not proceed with next week's ultra-long bond auction and will not issue ultra-long bonds this quarter because criteria for issuance was not met, the Bank of Canada said. (Reporting by Fergal Smith; Editing by Paul Simao and Grant McCool)

SOURCE: REUTERS

Canadian dollar posts near four-month high as greenback slides, oil climbs

TORONTO (Reuters) - The Canadian dollar strengthened to a nearly four-month high against its U.S. counterpart on Wednesday as the greenback fell broadly and oil prices rose, while investors also weighed talks taking place in Montreal to renegotiate NAFTA.

At 4 p.m. (2100 GMT), the Canadian dollar CAD=D4 was trading 0.7 percent higher at C$1.2331 to the greenback, or 81.10 U.S. cents.

The currency’s weakest level of the session was C$1.2428, while it touched its strongest since Sept. 25 at C$1.2318.

“It is largely reflecting a weaker U.S. dollar move,” said Mark Chandler, head of Canadian fixed income and currency strategy at RBC Capital Markets.

 

The U.S. dollar .DXY slid to a three-year low against a basket of major peers after the U.S. Treasury secretary said he welcomed weakness in the currency.

“There’s no need for a weaker U.S. dollar on the part of the U.S. economy,” Chandler said. “In some sense, his comments were misinterpreted.”

The price of oil, one of Canada’s major exports, was boosted by a record 10th straight weekly decline in U.S. crude inventories. U.S. crude oil futures CLc1 settled 1.8 percent higher at $65.61 a barrel.

Canada’s chief negotiator in talks to update the North American Free Trade Agreement, Steve Verheul, told Reuters he had “a constructive conversation” with his U.S. counterpart after presenting Canada’s suggested amendments to the sunset clause.

The United States has demanded a sunset clause that would kill NAFTA if it is not renegotiated after five years.

Investors are awaiting domestic data later in the week that could help guide expectations for further Bank of Canada interest rate hikes.

Last week, the central bank raised its benchmark interest rate by 25 basis points to 1.25 percent, its highest since January 2009, after recent data showed stronger inflation and strong job growth.

 

Canadian retail sales data for November is due on Thursday and the December inflation report is due on Friday.

Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries. The two-year CA2YT=RR fell 2.5 Canadian cents to yield 1.819 percent and the 10-year CA10YT=RR declined 27 Canadian cents to yield 2.263 percent.

The 10-year yield touched its highest intraday level since September 2014 at 2.271 percent.

Reporting by Fergal Smith; Editing by Phil Berlowitz and Peter Cooney

SOURCE: REUTERS

C$ strengthens ahead of NAFTA talks as wholesale trade rises

* Canadian dollar at C$1.2459, or 80.26 U.S. cents * Canadian wholesale trade rises 0.7 percent in November * Bond prices little changed across the yield curve TORONTO, Jan 22 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Monday, gravitating toward the middle of this year's range ahead of the resumption of talks to renegotiate NAFTA and as investors weighed domestic data showing an increase in wholesale trade. The value of Canadian wholesale trade rose for the second month in a row in November on broad gains across sectors, data from Statistics Canada showed. The 0.7 percent increase was shy of economists' forecasts for a 1 percent gain, while volumes rose 0.5 percent. The sixth and penultimate round of talks on renegotiating the North American Free Trade Agreement is due to take place in Montreal from Jan. 23-29. The future of NAFTA was the most significant downside risk the economy faced, the Bank of Canada said last week as it raised its benchmark interest rate, as expected, but tempered expectations for additional increases over the coming months. Separately, the member countries of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP), also known as TPP 11, gathered in Japan for two days of talks to try to forge a trade pact. Canada is holding out to secure protection of its cultural industries, like movies, TV, and music, and has said it will not be rushed into signing a deal that other members hope to conclude by March. At 9:20 a.m. EST (1420 GMT), the Canadian dollar was trading 0.3 percent higher at C$1.2459 to the greenback, or 80.26 U.S. cents. The currency traded in a range of C$1.2457 to C$1.252. Since the start of the year, the range has been C$1.2355 to C$1.2590. Speculators have raised bullish bets on the Canadian dollar for the second straight week, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed on Friday. As of Jan. 16, net long positions had edged up to 17,556 contracts from 17,461 a week earlier. The U.S. dollar dipped against a basket of major currencies, pressured by a U.S. government shutdown and strengthening economic growth in Europe that encouraged large investors to boost their expectations on the euro. Canadian government bond prices little changed across the yield curve, with 10-year rising 5 Canadian cents to yield 2.237 percent. The 10-year yield touched its highest intraday since September 2014 at 2.246 percent. U.S. crude prices were up 0.1 percent at $63.44 a barrel. Oil is one of Canada's major exports. (Reporting by Fergal Smith; Editing by Frances Kerry)

 

SOURCE: REUTERS

Canadian city to argue Trans Mountain oil pipeline route harmful

VANCOUVER, Jan 23 (Reuters) - The proposed route of Kinder Morgan Canada’s Trans Mountain pipeline expansion through the west coast Canadian city of Burnaby will damage parks, harm sensitive ecosystems and impact critical infrastructure, the city will argue on Tuesday.

The Vancouver suburb will present its case over three days to the Canadian energy regulator, National Energy Board (NEB), at hearings to help determine the exact route of the 1,147 kilometer (712 mile) oil pipeline. The project was approved by the Canadian government in 2016.

Burnaby, a fierce opponent of the C$7.4 billion ($5.9 billion) project, has been sparring with Kinder Morgan for years over construction of a second pipeline largely along the route of the existing one. The proposed “twinning” of the line would nearly triple capacity to 890,000 barrels per day. The pipeline carries oil from Alberta’s energy heartland to a marine terminal in Burnaby, British Colombia.

Late last year, the NEB ruled that Kinder Morgan could sidestep certain municipal permits that the company said it was unable to obtain from the city, allowing some early construction work to move ahead.

Despite the win, Kinder Morgan last week further delayed the start-up of the expanded line to December 2020, adding another three months to a previous nine month delay it blamed on the permitting difficulty.

The route hearings are a separate part of the regulatory process and are required before major construction can start. The current round will run until January 31, with more to come in communities all along the pipeline’s path.

The Trans Mountain expansion is backed by Canadian oil producers, whose landlocked product trades at a discount to the West Texas Intermediate benchmark, and who are desperate for access to international markets.

But the project faces opposition from certain municipalities along its route, the province of British Columbia, some Aboriginal groups and environmental activists, who worry about spills and are against the expansion of the Alberta oil sands. ($1 = 1.2466 Canadian dollars) (Reporting by Julie Gordon; Editing by Andrew Hay)

SOURCE: REUTERS

Canadian dollar slips ahead of NAFTA talks as oil prices fall

TORONTO (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Friday as lower oil prices offset domestic data showing the biggest increase in factory sales in 2-1/2 years, while investors prepared for another round of NAFTA talks next week.

At 4 p.m. EST (2100 GMT), the Canadian dollar CAD=D4 was trading at C$1.2507 to the greenback, or 79.96 U.S. cents, down 0.7 percent.

The currency traded in a range of C$1.2400 to C$1.2508. For the week, it fell 0.4 percent.

“The market is really going to have to price in a negative risk premium on the Canadian dollar, driven primarily on the breakup risks of NAFTA,” said Mark McCormick, North American head of FX strategy at TD Securities.

On Wednesday, the Bank of Canada raised its benchmark interest rate by 25 basis points to 1.25 percent, its highest since January 2009.

But expectations for additional rate hikes over the coming months were tempered after the central bank said the future of the North American Free Trade Agreement was the most significant downside risk the economy faced. Canada sends about 75 percent of its exports to the United States.

The sixth round of talks on renegotiating the North American Free Trade Agreement, or NAFTA, is due to take place in Montreal from Jan. 23-29.

Speculators have raised bullish bets on the Canadian dollar for the second straight week, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed. As of Jan. 16, net long positions had edged up to 17,556 contracts from 17,461 a week earlier.

Canadian manufacturing sales jumped 3.4 percent in November on strength in transportation equipment and petroleum and coal products, Statistics Canada said. Analysts in a Reuters poll had forecast a 2.0 percent gain.

U.S. crude CLc1 prices settled 0.9 percent lower at $63.37 a barrel as investors sold positions on re-emerging U.S. production concerns.

 

Foreign investment in Canadian securities, particularly bonds, remained strong in November and was on track to hit an annual record, separate data showed.

Canadian government bond prices were mixed across a steeper yield curve. The two-year CA2YT=RR rose 1.5 Canadian cents to yield 1.804 percent, while the 10-year CA10YT=RR fell 15 Canadian cents to yield 2.242 percent, its highest since September 2014.

Reporting by Fergal Smith; Editing by Phil Berlowitz and Lisa Shumaker

SOURCE: REUTERS

Kinder Morgan further delays Canada Trans Mountain oil pipeline

(Reuters) - Kinder Morgan Canada said on Wednesday that the start-up of its Canadian Trans Mountain oil pipeline expansion would be delayed by three months to December 2020, marking the latest setback to a project facing fierce local opposition.

Trans Mountain originally had an operational date of December 2019, but the company in October pushed that back to September 2020 because of difficulty in obtaining permits.

The company is focusing on gaining permit approvals, and is holding off on starting full construction of the C$7.4 billion ($5.95 billion) project, Chief Executive Steve Kean said.

“What we’re doing here is all the right things,” Kean said on a conference call with analysts about quarterly results. “We are being careful stewards of our capital and we’re doing everything we can to get the clarity we need to proceed.”

The proposed pipeline expansion from Canada’s oil-rich Alberta province to the British Columbia coast would nearly triple its capacity to 890,000 barrels per day.

Canadian oil producers, whose landlocked product trades at a discount to the West Texas Intermediate benchmark, say they need additional pipeline capacity to fetch better prices.

But Trans Mountain faces opposition from some municipalities along the pipeline’s route, certain aboriginal groups and environmental activists. Concerns range from potential spills to providing an outlet for Alberta’s oil sands, which some consider a dirtier form of extracting oil than conventional means.

Last month, Canada’s energy regulator ruled in favor of the company’s appeal to sidestep some municipal permits for the pipeline.

Kinder Morgan Canada was spun off from Houston-based Kinder Morgan Inc last May.

 The company also said that its net income more than doubled to C$46.4 million ($37.3 million) in the fourth quarter, from a year earlier.

Kinder Morgan Canada shares closed up 0.2 percent, or 4 Canadian cents, at C$16.75 in Toronto.

Reporting by John Benny in Bengaluru and Rod Nickel in Calgary, Alberta; Editing by Maju Samuel and Peter Cooney

SOURCE: REUTERS

Oil hovers near three-year high despite rising U.S. output

CALGARY, Alberta (Reuters) - Oil hovered near a three-year high above $70 a barrel on Monday on signs that production cuts by OPEC and Russia are tightening supplies, although analysts warned of a “red flag” due to surging U.S. production.

International benchmark Brent crude futures LCOc1 last traded 29 cents higher at $70.16 by 1937 GMT, having risen to a high of $70.37 a barrel earlier in the session.

U.S. West Texas Intermediate (WTI) crude futures CLc1 gained 51 cents at $64.81 a barrel. Both benchmarks hit levels not seen since December 2014, although trading was thin due to a holiday in the United States.

A production-cutting pact between the Organization of the Petroleum Exporting Countries, Russia and other producers has given a strong tailwind to oil prices.

Growing signs of a tightening market after a three-year rout have bolstered confidence among traders and analysts.

“It’s catching a lot of people by surprise and I think (prices) are sustainable,” said Phil Flynn, an analyst at Price Futures Group. “We’re seeing the reality of strong demand and declining supplies.”

 

Bank of America Merrill Lynch on Monday raised its 2018 Brent price forecast to $64 a barrel from $56, forecasting a deficit of 430,000 barrels per day (bpd) in oil production compared to demand this year.

“OPEC and non-OPEC producers remain committed to production cuts at the same time world oil demand continues to increase,” said Andrew Lipow, president of Lipow Oil Associates in Houston.

“As we go through 2018, the market is also going to continue to look at geopolitical supply disruptions that could occur in Libya, Nigeria and Venezuela.”

RED FLAG

Still, some analysts have warned that the 13 percent rally since the start of the year could peter out due to global refinery maintenance and rising North American production.

U.S. energy companies added 10 oil rigs in the week to Jan. 12, taking the number to 752, energy service firm Baker Hughes (GE.N) said on Friday.

That was the biggest increase since June 2017.

In Canada, energy firms almost doubled the number of rigs drilling for oil last week to 185, the highest level in 10 months.

Vienna-based consultancy JBC Energy expects U.S. production to grow by 600,000 bpd in the first quarter of 2018 compared to a year earlier.

 

“From a fundamental perspective, the surge in U.S. managed money raises a clear red flag for us. We see the U.S. complex as decidedly bearish over the next two months.”

But Flynn said a fast climb in U.S. output is not so clear.

“The realities of the shale market are starting to sink in. Shale producers have to add a lot of rigs, frack crews and add a lot of investment. It takes time to raise that production.”

Additional reporting by Ron Bousso in London and Henning Gloystein in Singapore; Editing by Louise Heavens and Bill Trott

SOURCE: REUTERS

Oil mostly flat as rising U.S. output offsets OPEC worries

NEW YORK (Reuters) - Oil prices were little changed on Monday, trading near their highest since May 2015, as political concerns in some OPEC nations offset projections for higher U.S. oil production.

“Oil prices are finely balanced in today’s trading session. Ongoing protests in Iran, together with recent detention of several princes in Saudi Arabia, have reinvigorated geopolitical concerns,” Abhishek Kumar, Senior Energy Analyst at Interfax Energy’s Global Gas Analytics in London.

”However, prospects for further increases in U.S. oil production amid recent improvements seen in oil prices continue to promote bearish sentiment,” Kumar said.

Brent futures LCOc1 gained 16 cents, or 0.2 percent, to settle at $67.78 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 rose 29 cents, or 0.5 percent, to settle at $61.73

Last week, both contracts rose to their highest since May 2015 with Brent at $68.27 and WTI at $62.21.

U.S. production C-OUT-T-EIA is expected soon to rise above 10 million barrels per day, largely thanks to soaring output from shale drillers, according to federal energy data. [EIA/M]

Only Russia and Saudi Arabia produce more.

“The U.S. oil price is now into a range that is anticipated to attract increased shale oil production,” said Ric Spooner, chief market analyst at CMC Markets in Sydney.

“Traders may decide that discretion is the better part of valor while markets wait on evidence of what happens to the rig count and production levels over the next couple of months,” Spooner said.

U.S. drillers reduced the number of oil rigs operating by five in the week to Jan. 5, the first decline in three weeks, according to a report by energy services firm Baker Hughes on Friday. [RIG/U]

Rising U.S. production is the main factor countering output cuts led by the Middle East-dominated Organization of the Petroleum Exporting Countries and by Russia, which began in January 2017 and are set to last through 2018.

 A senior OPEC source from a major Middle Eastern oil producer said OPEC was monitoring unrest in Iran, as well as Venezuela’s economic crisis, but will boost output only if there are significant and sustained production disruptions from those countries.

Stephen Innes, head of trading for Asia/Pacific at futures brokerage Oanda in Singapore, said “the OPEC versus shale debate will rage” this year, being a key price-driving factor.

However, Innes added that Middle East turmoil would remain a key focus for oil markets and had the potential to “send oil prices rocketing higher.”

Additional reporting by Dmitry Zhdannikov in London, Henning Gloystein and Florence Tan in Singapore; editing by Marguerita Choy and Diane Craft

SOURCE: REUTERS

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