MARKET WRAP FOR DAY ENDING WED. 12/30/98 / With Focus On Canada + Oil & Gas (Page 5 of 6)
Todays Update
Page Content Index
12/31 04:23 US Prods Outlook-The cold won't unleash bulls yet
12/31 08:02 World oil trails tamely to end of a torrid year
12/31 10:26 Oil companies drill Canada east coast well
10:45 Analyst Comments - Moody's Up's British Petroleum
12/31 12:01 ADR Report - British Petroleum Rises
12/31 12:04 Analyst Coments - Deutsche cuts major oil earnings
12/31 12:15 Toronto stocks edge up in sluggish midday
12/31 12:30 Gulf of mexico rig count down three to 130
12/31 13:00 Canadian spot natgas prices ease ahead of holiday
12/31 13:03 U.S. spot natgas prices boosted by cold weather
12/31 13:07 Amoco Canada unit announcing no layoffs, sales
12/31 13:09 NYMEX crude rises above $12 on buying spurt
12/31 13:42 NYMEX gas ends higher ahead of cold holiday wknd
12/31 14:17 CanOxy tells Yemen workers not to travel
12/31 XXXXX Current market references
12/31 04:23 US Prods Outlook-The cold won't unleash bulls yet
Cooler weather finally arrived to the top-consuming New York Harbor hub, and colder temperatures were expected in the Midwest, but traders and analysts on Monday said heating oil spikes were unlikely to poke holes through the overhang this week.
While heating oil, crude and gasoline futures gained Monday on news of a planned meeting among oil ministers from Mexico, Venezuela and Saudi Arabia in Madrid on Thursday, products trading was light as buyers were wary of the gains.
Players were more concerned about the temperatures. Weather Services Corporation forecast Monday that temperatures on Tuesday and Wednesday would be four to eight degrees Fahrenheit above normal and two and six degrees above normal through Saturday.
"The big block of cooler than normal air working its way across the U.S. may at least hold bearish sentiment in check," said one analyst.
While better crude oil prices and cooler temperatures may help heat, "stocks may also rise for the next couple of weeks before heating demand typically exceeds production," he said.
Another Gulf trader said, "The market has already built into it heating oil stock gains, so heat probably won't sink either."
Sentiment was bearish on the distillates, with a number of Northeast distillate tanks being freed up, and even a dirty crude tank being converted for gasoline storage, traders said.
On gasoline, traders in all the markets said they were split on the direction of gasoline prices.
On the Gulf Coast "the market is making the same kind of seasonal bottom that heating oil makes in June or July," said an analyst. "The market doesn't move higher because stocks are about to trend down, but rather because the market can't possibly get any further out of favor."
In the New York Harbor, the arbitrage for European cargoes was closed although one European refiner on Monday was trying to sell a U.K. conventional grade cargo into the Harbor, traders said.
"With both arbs closed - from Europe and the Gulf, we should see things get better only in a week and a half's time," said another gasoline trader.
"Conventional gasoline on the Gulf has been relatively tight -- the Gulf Coast differential will have to give up to allow the arb to open to the Harbor or New York Harbor will have to go up," said a Harbor trader.
The Gulf Coast gasoline market was supported, at least at the highest prices since mid November, despite the American Petroleum Institute's (API) record output data last week, as traders were putting the low RVP summer grade gasoline into storage since values for April supplies were around 6.0 cents per gallon higher than the January NYMEX.
"It's a function of the price of butane versus the price of gasoline," said one Gulf Coast trader. "We've done a lot of the summer grade today, players will carry it and sell it to the Gulf," he said.
Gasoline supplies on the API weekly stock report rose more than expected on for the week ending December 4, because of strong refinery production.
Crack spreads firmed slightly on Monday closing at -0.52 cents and compared to -0.73 cents for the last 15 days and -0.68 cent for November.
But one analyst was concerned "that refinery output has been overstated the last couple of weeks and there could be a surprise adjustment at some point."
12/31 08:02 World oil trails tamely to end of a torrid year
Oil prices limped sideways on Thursday to finish the year 40 percent lower than they started it as the market stoops under a global supply glut.
World benchmark Brent was worth just $10.53 a barrel at the close of trade, unchanged over the day and over six dollars less than early January after one of the steepest price slides on record.
Even sporadic military clashes in key producer Iraq have failed to lift prices, still in sight of 12-year lows at $9.55 struck just last week.
Iraqi officials insisted on Thursday that its air defences had shot down a U.S. or British plane the previous day, despite earlier denials by Washington and London.
It was the second such clash since December's four-day Anglo-American bombing campaign aimed at punishing Iraq for refusing to co-operate with weapons inspectors.
But oil prices have gained little benefit as some 1.8 million barrels per day (bpd) of Iraqi crude exports flowed uninterrupted through the crisis.
The price rut means a continued squeeze on producer revenues, already reeling as this year's mild temperatures and Asian economic tribulations prey on global consumption.
A miserly average of $13.34 a barrel in 1998 is the lowest annual level since 1976 and a third below last year's $19.30 average.
Snared by sluggish demand and an unstinting stock surplus, producer cartel OPEC will early next year have to decide whether to deepen its own 2.6 million bpd of output cuts.
The gloom is intensifying pressure to take further action before the shocked group's next full conference, scheduled for March.
But OPEC's dual hardship of sacrificing output only to see prices scrape still lower will stoke up debate within the quarrelsome group over how to share out any new output cuts.
Iran argues that Saudi Arabia - comfortably OPEC's biggest producer - should shoulder the biggest burden as Riyadh has gained most from the long U.N. embargo on Iraqi oil exports.
Saudi Arabia rejects both this claim and Iran's demand for its OPEC output allocation to be 300,000 bpd higher than set in the producer cutback packages.
The group's hands are further tied as Hugo Chavez, President-elect in key U.S. supplier and OPEC member Venezuela, does not take office until February 2.
12/31 10:26 Oil companies drill Canada east coast well
The consortium of oil companies that dominate operations on Canada's east coast began drilling a C$30.5-million well on Wednesday at the Hebron oil field off Newfoundland to further evaluate its potential.
The Hebron D-94 well, located on the Grand Banks, 340 km southeast of St. John's, Newfoundland, is the fourth drilled since the field was discovered in 1980.
Partners include Chevron Corp. <CHV.N> unit Chevron Canada Resources with 31.9 percent, Mobil Corp. <MOB.N> unit Mobil Oil Canada with 36.8 percent, Norsk Hydro <NHY.OL> with 9.4 percent and Petro-Canada <PCA.TO> with 21.9 percent.
The four have stakes in virtually all offshore Newfoundland projects, including Hibernia and Terra Nova, which is about 10 km south of Hebron.
The companies said they were using the Glomar Grand Banks rig, owned by Glomar International (Canada) Drilling Co., to drill the D-94 well.
12/31 10:45 Analyst Comments - Moody's Up's British Petroleum & Upgrades Debt Rating
Moody's Investors Service assigned a Aa1 issuer rating to BP Amoco plc, the entity created by the merger of The British Petroleum Company plc (BP) and Amoco Corporation.
At the same time the agency upgraded from Aa2 to Aa1 the senior unsecured long-term debt ratings of BP and its guaranteed subsidiaries, and confirmed the Aa1 senior unsecured long-term debt ratings of Amoco and its guaranteed subsidiaries.
12/31 12:01 ADR Report - British Petroleum Rises
British Petroleum Co. Plc <BP.L> ADRs rose Thursday, helped by U.S. approval of the company's merger with Amoco Corp. <AN.N>.
Dealers said volumes in ADRs -- American Depositary Receipts -- were thin ahead of the New Year's holiday, exaggerating price moves.
"Everyone is looking for bargains," a trader said. "The volumes are so thin that prices ... are pretty irrelevant."
European and many Asian and Latin American markets were closed. Volumes in European ADRs have dried up recently ahead of Friday's start of the single European currency, the euro.
12/31 12:04 Analyst Coments - Deutsche cuts major oil earnings
Deutsche Bank Securities analyst Michael Young has reduced his fourth quarter earnings estimates for Amoco Corp <AN.N> to $0.15 per share from $0.20, British Petroleum Co Plc <BP.L> to $0.60 from $0.70, Exxon Corp <XON.N> to $0.45 from $0.50.
-- Young reduced BP's 1999 estimate by $0.15 to $2.90, Exxon's 1999 estimate by $0.10 to $2.45, Mobil by $0.15 to $2.50 and Royal Dutch/Shell Group <RD.AS><SHEL.L> by $0.05 to $1.35.
-- "Without belaboring how pathetic the earnings picture was for the industry, the main point to make is that it does not look any better for the first half of 1999," Young said in a research report.
-- He said that oil company shares do not reflect the continued deterioration in commodity prices and profitability.
-- "It is still too early to buy oil stocks," Young said.
12/31 12:15 Toronto stocks edge up in sluggish midday
Toronto stocks were narrowly firmer in very sluggish New Year's Eve trade at midday on Thursday with stronger energy stocks the sole highlight.
Trading was extremely slow and was expected to grind virtually to a halt toward the end of the session.
Markets are closed on Friday for the New Year's Day holiday.
"It's a tiny volume," said John Kellett, vice-president of equities at Royal Bank of Canada.
The Toronto Stock Exchange 300 Composite index added 7.91 points or 6437.96 in scanty turnover of 17.8 million shares worth C$197.1 million shares. Advances nosed past declines 380 to 278, with 284 issues steady.
Only three of Toronto's 14 subsectors were softer. Gaining groups were led by oil and gas which rose more than 1 percent. Just six of the 50 stocks in the energy group were easier.
12/31 12:30 Gulf of mexico rig count down three to 130
There were 130 rigs under contract in the Gulf of Mexico as of Dec. 31, down three from the previous week, Offshore Data Services said Thursday.
The utilization rate for rigs working in the Gulf, based on a total fleet of 178, was 73.0 percent.
The number of working rigs in the European/Mediterranean area was unchanged at 100 rigs under contract. With a total fleet of 107, the utilization rate was 93.5 percent.
The worldwide rig count declined by two this week to 515 out of a total fleet of 613, a utilization rate of 84 percent.
12/31 13:00 Canadian spot natgas prices ease ahead of holiday
Spot Canadian natural gas prices eased in the west on Thursday as more supply became available and demand waned ahead of the long holiday weekend, industry sources said.
Prices at Alberta's AECO storage hub for delivery through the weekend slipped about nine cents to C$2.42-2.45 per gigajoule (GJ), while January baseload business was reported around C$2.47.
"Some field receipts came back late yesterday, and NOVA has been packing this morning," one Calgary-based trader said.
However, the cold weather now delivering temperature highs in the single-digits (Fahrenheit) in southern Alberta are expected to continue through the weekend, according to Weather Services Corp., though slightly milder weather is forecast for early next week.
At the export markets, Sumas/Huntingdon prices for January 1-4 were quoted around US$1.70 per million British thermal units (mmBtu) as warmer-than-normal weather covered the Pacific Northwest.
12/31 13:03 U.S. spot natgas prices boosted by cold weather
U.S. spot natural gas prices moved higher Thursday in light pre-holiday trade as colder-than-normal weather kept buyers clutched to the market, industry sources said.
The American Gas Association reported Wednesday that U.S. gas stocks fell 167 bcf last week to 2.8 tcf, or 86 percent of capacity. Despite the large draw, inventories were still 633 bcf ahead of a year ago.
Wednesday's six- to 10 day forecast showed mostly above-normal temperatures in the West, though below-normal temperatures are expected to cover the eastern half of the U.S., including the Great Lakes region.
January swing prices at Henry Hub were quoted about 10 cents higher at $1.92-1.96 per mmBtu.
Houston Lighting and Power's 1,250-megawatt South Texas 2 nuclear unit was back to full power by Thursday morning after Monday's unexpected outage.
In the Midcontinent, prices also rose at least five cents to trade mostly in the low-$1.90s on pipelines like Panhandle, ANR and NGPL, with the Northern at Demarcation market pegged at $1.97.
Chicago city-gate gas was talked an equal amount higher at $1.96-1.99, with late business reported done at $1.94.
In New York, city-gate swing prices were again talked at $3 or higher, with some quotes heard as high as $3.60.
12/31 13:07 Amoco Canada unit announcing no layoffs, sales
Amoco Corp.'s <AN.N> Canadian unit will not be announcing staff cuts or asset dispositions stemming from the soon-to-be-sealed worldwide merger of Amoco and British Petroleum Co. Plc <BP.L>, a spokeswoman for the large subsidiary said on Thursday. Calgary based Amoco Canada Petroleum Co. Ltd. will make public somenews regarding its management
in the wake of the merger, however, Amoco Canada's Gay Robinson said.
"We are not planning to send out a news release about layoffs or asset disposition or any of those things," Robinson said. "We'll just talk about the management team and put a bit of a Canadian perspective on it."
Amoco Canada dominates several aspects of the country's energy industry, especially natural gas and gas byproduct production, processing and transportation. It is also one of the country's biggest producers of heavy oil, the tar-like crude known for its abundance in western Canada and current low returns.
The Canadian unit, with 2,100 employees and 1997 revenues of $4.5 billion, represents about 9 percent of Amoco's worldwide assets and generated 13 percent of its net income last year.
During a visit to Calgary in early autmn, Amoco Chief Executive Larry Fuller said he considered the bulk of Amoco Canada's assets to be strategic in the new BP Amoco Plc.
London-based BP and Amoco of Chicago were slated to close their $55-billion merger later on Thursday.
12/31 13:09 NYMEX crude rises above $12 on buying spurt
February crude futures on the New York Mercantile Exchange (NYMEX) rose above $12 a barrel Thursday as buying on moderate volume from some big players, including funds, enlivened the shortened pre-holiday trading session, traders said.
The expiring January heating oil and gasoline contracts posted hefty gains as players covered or unwound positions, they said.
Forecasts of below-normal temperatures in the next five to 10 days gave heating oil futures a lift, they added.
At 1244 EST/1744 GMT, February crude was up 32 cents at $12.07 a barrel, after hitting $12.08 heading into the session's last 15 minutes on the market's last trading day of the year. Near the opening, the market fell to an early low of $11.67.
January heating oil gained 0.88 cent to 33.80 cents a gallon,easing a bit after hitting a session high of 34.30 cents. The February contract was not far behind, adding 0.73 cent at 34.35 cents.
January gasoline was up 1.23 cents at 36.00 cents a gallon, its session high, 15 minutes before the session's close, and then eased back to up only 0.23 cent at 35.00 cents. The February contract gained 0.85 cent at 36.70 cents and then fell back to 36.55 cents, up 0.70 cent.
For the next five days, temperatures in the Northeast, the biggest heating oil consuming region in the country, were expected to be six to 15 degrees Fahrenheit below normal, according to Weather Services Corp., a private weather forecaster based in Lexington, Mass.
For the next six to 10 days, temperatures in region will be up to 7 degrees below normal, the WSC said.
12/31 13:42 NYMEX gas ends higher ahead of cold holiday wknd
NYMEX Hub natgas futures settled higher on Thursday as cold weather and sporadic snow in much of the U.S. sparked more short-term buying, industry sources said.
February last traded at $1.94 per mmBtu, up 5.4 cents from Wednesday's settlement, after trading in a range of $1.885-1.96. Trading ended Thursday at 1300 EST.
March last traded at $1.93, up 5.1 cents, while other deferreds in 1999 were also up by a few cents.
NYMEX will be closed Friday for the New Year's Day holiday.
The bitter cold now in the Northeast is expected to continue through the weekend, keeping swing demand fairly strong on Texas Eastern and Transco. More moderate weather is forecast for the region by early next week, though temperatures are expected to remain below normal.
Next week's forecast also called for above-normal temperatures in the West and colder-than-normal weather in most of the eastern U.S., including the Great Lakes region.
Technically, traders pegged February resistance at $1.96-1.965, and then at $2.00 and the $2.14-2.18 gap. Support was seen at $1.86, and then at this week's new contract low of $1.77 and $1.61, which is the spot continuation low for the year.
In the cash market, early buying sent Henry Hub prices about 10 cents higher to the low- to mid-$1.90s. Midcontinent cash was also higher in the low-$1.90s, though some softening surfaced late, with Chicago seen trading at $1.93-1.99.
As of 1235 EST, NYMEX said 21,330 Hub contracts had traded.
12/31 14:17 CanOxy tells Yemen workers not to travel
Canadian Occidental Petroleum Ltd. Yemen's biggest oil producer, has advised its staff in the Middle East nation to restrict travel in the wake of this week's raid on kidnappers that left four foreigners dead. Calgary based CanOxy said, however, that the move was merely a precaution and noted that none of its roughly 600 employees in Yemen had ever been victims of a kidnapping and that its operations had not been targeted in terrorist attacks.
Forty percent of the company's staff in the country are expatriots and the rest are Yemeni nationals, CanOxy spokesman Kevin Finn said.
"We keep our people informed of what's going on, and we're certainly recommending that they be more cautious and travel only for good reasons," Finn said on Thursday.
CanOxy is the operator and 52-percent owner of the Masila block in Yemen, which produces about 205,000 barrels of oil a day. It also operates a pipeline in the southern part of the country to transport the crude.
Finn said that the line had never been sabotaged, unlike another in the country's northwest operated by Dallas based Hunt Oil Co., which is reportedly damaged routinely.
Yemeni security forces attacked the stronghold of presumed Islamic militants on Tuesday, saying the kidnappers had begun to execute 16 tourists they had seized a day earlier. Three Britons and one Australian died. An American woman was wounded.
----------------------------------------------------------------------------------
References
Canadian Market Digest
quote.yahoo.com
Canadian Markets/Sectors
quote.yahoo.com
Canadian Most Actives
quote.yahoo.com
----------------------------------------------------------------------------------
|
