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Energy Summary for March 27, 2024

2024-03-27 17:56 ET - Market Summary

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by Stockwatch Business Reporter

West Texas Intermediate crude for May delivery lost 27 cents to $81.35 on the New York Merc, while Brent for May lost 16 cents to $86.09 (all figures in this para U.S.). Western Canadian Select traded at a discount of $14.50 to WTI, down from a discount of $14.40. Natural gas for May lost seven cents to $1.72. The TSX energy index added 1.64 points to close at 282.79.

Oil prices wobbled and fell, as traders sifted through mixed reports. A bullish forecast from JPMorgan predicted that Brent oil prices could be "headed to $100 (U.S.)" as early as September, based on rising demand and geopolitical tensions. This was offset, however, by bearish weekly data from the U.S. Energy Information Administration, which reported that domestic crude inventories rose by 3.17 million barrels last week. Analysts were expecting a decrease of one million barrels.

Here in Canada, Adam Waterous's Strathcona Resources Ltd. (SCR) lost 89 cents to $28.29 on 94,500 shares, after releasing its year-end financials. They held few surprises, given that the company already told investors last month that its fourth quarter production averaged 186,100 barrels of oil equivalent a day. Debt edged down to $2.7-billion as of Dec. 31 from $2.8-billion as of Sept. 30. Strathcona patted itself on the back for chipping away at the debt, and for persuading its bankers to increase its credit facility at the end of this month to $2.5-billion from $2.3-billion. (This extra room could come in handy, given that Strathcona -- which opted to leave the following information out of the press release -- had a working capital deficit of $415-million as of Dec. 31.) The financials included a guidance reduction. Citing a decision to defer tying in some gas wells amid weak gas prices, Strathcona trimmed its production guidance to a range of 187,500 to 192,500 barrels a day (mostly oil) from the prior target of 190,000 to 195,000 barrels a day. The original target was already lower than the 200,000-barrel-a-day predictions of analysts. Now it is going lower still, even as the budget stays unchanged at $1.3-billion -- never a popular combination.

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