Cenovus Energy: the top integrated energy loser
Cenovus Energy (CVE) stock has been the biggest loser so far this week (starting October 2, 2017) in the integrated energy sector. CVE has fallen from last week’s close of $10.02 to $9.84 on October 4, or by 1.8%.
While there’s been no specific news release by the company, CVE stock had been seeing a strong uptrend since the end of June 2017 and has risen by ~45% since then. Last week, CVE’s rally faced a stiff resistance on Monday at its 200-day moving average, and since then, CVE’s stock has been in decline. CVE’s current 200-day moving average now stands at $8.52.
On September 25, 2017, CVE announced the divestiture of its crude oil and natural gas operations in Suffield, Alberta (Canada), to International Petroleum for cash proceeds of $512 million. CVE will also receive contingent payments each month whenever WTI (West Texas Intermediate) crude prices move above $55 per barrel or Henry Hub natural gas moves above $3.50 MMBtu (million British thermal units).
These contingent payments will begin on January 1, 2018, and end on December 31, 2019. The payments are capped, with a maximum combined payment of $36 million.
Other declining stocks this week
Other integrated energy losers this week include China National Offshore Oil (CEO), Eni (E), Imperial Oil (IMO), and Statoil ASA (STO), which have fallen 1.24%, 0.91%, 0.72%, and 0.70%, respectively, so far.
Notably, the Vanguard Energy ETF (VDE), which has exposure to integrated heavyweights like ExxonMobil (XOM) and Chevron (CVX), has fallen 0.25% so far this week, compared with the SPDR S&P 500 ETF’s (SPY) 0.77% rise.
On October 4, 2017, natural gas (UNG) November futures closed at $2.94 per MMBtu (million British thermal units), a rise of 1.6% from the last trading session.
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As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
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