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Oil retreats as China's COVID resurgence imperils demand outlook – BNN

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Oil fell as China issued more lockdowns, raising fresh concerns about demand slowing in the world’s biggest crude importer. 

Futures in New York fell almost US$8 to settle just shy of US$106 a barrel on Monday. Markets sold off after authorities in Shanghai said they will lock down half of the city in turns for mass Covid-19 testing. Prices remained lower even after OPEC+ signaled it’s likely to stick to plans for a modest supply increase when they meet Thursday. 

“China oil demand is approximately 15 million barrels per day,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “The magnitude of the selloff reflects fears that Covid lockdowns in China could spread, significantly impacting demand at a time when the oil market is trying to find alternatives to Russian oil supplies.”

Traders added that in the wake of historic volatility many market participants are just covering their positions, keeping liquidity at the lowest level in years and leading to outsized moves on any news. With hedges becoming more time consuming and expensive, it could disrupt real-world deliveries of crude oil if the situation doesn’t improve.

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Russia’s invasion of Ukraine continues to disrupt availability of key commodities, adding to inflationary pressures on the global economy. Despite the day’s selloff, oil is still heading for a fourth month of gains as a tight market is exacerbated by the shunning of Russian supplies by buyers. The country’s exports from March 17-23 fell by more than a quarter from the previous week, according to industry data.

On Monday, United Arab Emirates Energy Minister Suhail Al-Mazrouei said additional crude supplies won’t be added if the market is balanced and resources are in the market. If no alterations are made, the cartel will ratify an increase of 430,000 barrels a day for the month of May as previously announced.

Prices

  • WTI for May delivery fell US$7.94 to settle at US$105.96 a barrel in New York
  • Brent for May settlement lost US$8.17 to settle at US$112.48 a barrel

Demand concerns are starting to emerge with the spread of the virus in China. Shanghai — a city of 25 million people — will first lock down areas east of the Huangpu River, which includes its financial district and industrial parks, for four days starting Monday. Then the restrictions will shift to the city’s west for another four days, according to a statement from the local government.

A temporary pause in hostilities by Yemen’s Houthis against Saudi Arabia was also contributing to lower oil prices on Monday. The group’s rebel leader announced a three-day truce on Saturday after an escalation of attacks on key Saudi infrastructure over the past week, according to a TV report.

The U.S., meanwhile, said reviving a nuclear deal with Iran is not imminent after recent requests from Tehran that included Washington removes the Islamic Revolutionary Guard Corps from its list of terrorist organizations. Iran is an ally of Russia, and its war in Ukraine is also complicating negotiations.

Related coverage:

  • Canada’s oil sands would play the biggest role in the government’s pledge to boost crude and natural gas exports by 300,000 barrels a day this year to compensate for Russian supplies, according to the lead trade organization for the industry.
  • It’s getting both costlier and more time consuming to hedge oil as liquidity shrinks in the futures market, slowing transactions and threatening to ultimately disrupt real-world deliveries if the situation doesn’t improve.
  • Shell Plc is restricting deliveries of a regular type of gasoline to filling stations in the Hamburg area, according to a person familiar with the matter.

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TC Energy cuts cost estimate for Southeast Gateway pipeline project in Mexico

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November 7, 2024

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CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.

It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.

The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.

Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.

TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.

The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:TRP)

The Canadian Press. All rights reserved.

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BCE reports Q3 loss on asset impairment charge, cuts revenue guidance

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November 7, 2024

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BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.

The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.

On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.

“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.

“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”

Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.

BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.

The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.

BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.

It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.

The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”

Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:BCE)

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Canada Goose reports Q2 revenue down from year ago, trims full-year guidance

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November 7, 2024

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TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.

The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.

Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.

On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.

In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.

It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:GOOS)

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