![]() ![]() Refinery margins are expected to remain depressed in 2Q23 with the full absorption of operating costs and the required inventory build-up to support operations at Toledo and Superior while utilization rates are expected to land close to the 50-per-cent level. “However, the strongest quarterly improvement in CFPS is expected to come from CVE, which is beginning to benefit from a recovery in downstream operations now that the Toledo and Superior refineries have both started coming back online. Meanwhile, CPG and VET are expected to lead light and medium oil-weighted mid-cap producers with strong cash prints on the back of stellar well results and an active hedge book, respectively. “On the other hand, there were some notable standouts that received a tailwind from narrowing WTI–WCS differentials, namely ATH, HWX, MEG and TVE. “Looking ahead to the reporting season, we expect the trend of cash flow moderation to continue, with most companies expected to post modest reductions in quarterly CFPS prints vs 1Q23, particularly among the small-cap natural gas producers, which are expected to bear the brunt of softer commodity prices and wildfire-related disruptions,” said Mr. He also trimmed his NYMEX forecast for next year to US$4 per thousand cubic feet from US$4.50, wanting “better visibility on production declines approaching the critical winter heating season.” In a research report released Tuesday, the analyst maintained his “constructive” outlook on oil price, however he acknowledged his prior 2024 forecast of US$90 per barrel for WTI was “too aggressive,” pointing to a “a global economic slowdown and a sluggish recovery in Chinese demand exiting zero-COVID.”Īccordingly, he lowered his 2024 estimate by US$5 to US$85 per barrel. We also do not expect major changes in capital returns as producers continue approaching net debt targets.” To that end, with a few notable exceptions, particularly among heavy oil producers benefiting from tightening WTI–WCS differentials, we expect the trend of cash flow moderation to continue, with most companies expected to post modest reductions in quarterly CFPS prints vs 1Q23. We also highlight an active turnaround season for oil sands producers and refiners. ![]() ![]() throughout 2Q23 provided a welcome opportunity to reset expectations. “Pardon our cynicism, but for many producers, the wildfires that raged across Alberta and northeast B.C. “Wildfires, wildfires, wildfires - get ready to hear a lot about wildfires!,” he said. Inside the Market’s roundup of some of today’s key analyst actionsĭesjardins Securities analyst Chris MacCulloch expects the impact of the wildfires in Western Canada will dominate focus during the coming second-quarter earnings season for Canadian energy companies. ![]()
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