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Energy Summary for May 5, 2020

2020-05-05 20:29 ET - Market Summary

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by Stockwatch Business Reporter

West Texas Intermediate crude for June delivery shot up $4.17 to $24.56 on the New York Merc, while Brent for July added $3.77 to $30.97, going back above $30 for the first time in over three weeks (all figures in this para U.S.). Both benchmarks jumped as several U.S. states, as well as some European and Asian countries, began to ease COVID-19-related lockdown measures, spurring hopes of a recovery in fuel demand. Here in Canada, Western Canadian Select traded at a discount of $4.86 to WTI, up from a discount of $4.90. Natural gas for June added 14 cents to $2.13. The TSX energy index added a fraction to close at 74.14.

Oil sands producer MEG Energy Corp. (MEG) added 47 cents to $3.38 on 16.4 million shares, after releasing its first quarter financials and making another cut to its full-year budget. The financials, which showed production of 91,600 barrels a day and cash flow of 26 cents a share, were in line with analysts' predictions. MEG used them as an opportunity to hype its "strong financial liquidity" (a phrase it repeated no fewer than three times). Then, proving that even the sharpest cuts can be spun as a positive by a talented PR crew, MEG cheered its ability to "enhance" liquidity by shearing off another chunk of its budget and dropping to bare-bones production levels. The company had already cut its budget to $200-million from $250-million in March, but said at the time that it could still achieve full-year production in the mid-90,000-barrel-a-day range. Now, however, MEG is cutting the budget to $150-million and lowering its production forecast to around 60,000 barrels a day for the second quarter.

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