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March Nymex natural gas (NGH24) on Friday closed +0.029 (+1.41%).

Nat-gas prices Friday recovered from a 9-month nearest-futures low and closed moderately higher.  Fund short covering emerged in nat-gas futures Friday when prices failed to break below $2 MMBtu, a significant support level.   Nat-gas prices have sold off sharply over the past three weeks as unseasonably warm U.S. temperatures have reduced heating demand for nat-gas.  Forecaster Maxar Technologies said Friday that the eastern half of the U.S. is seeing forecasts trend warmer for February 7 to 11.

Nat-gas prices are also under pressure after the Freeport LNG nat-gas export terminal in Texas announced last Friday that it is shutting one of its three production units for a month for repairs after extreme cold in Texas damaged equipment.  The closure of one of the units will limit U.S. nat-gas exports and increase U.S. nat-gas supplies.

Lower-48 state dry gas production Friday was 104.7 bcf/day (+9.3% y/y), according to BNEF.  Lower-48 state gas demand Friday was 89.9 bcf/day (-20% y/y), according to BNEF.  LNG net flows to U.S. LNG export terminals Friday were 13.8 bcf/day (+2.8% w/w), according to BNEF.

The U.S. Climate Prediction Center said there is a greater than 55% chance the current El Nino weather pattern will remain strong in the Northern Hemisphere through March, keeping temperatures above average and weighing on nat-gas prices.  AccuWeather said El Nino will limit snowfall across Canada this season in addition to causing above-normal temperatures across North America.

An increase in U.S. electricity output is positive for nat-gas demand from utility providers.  The Edison Electric Institute reported Wednesday that total U.S. electricity output in the week ended January 27 rose +1.0% y/y to 80,177 GWh (gigawatt hours), although cumulative U.S. electricity output in the 52-week period ending January 27 fell -0.3% y/y to 4,105,901 GWh.

Thursday’s weekly EIA report was bearish for nat-gas prices as nat-gas inventories for the week ended January 26 fell -197 bcf, a smaller draw than expectations of -203 bcf but above the 5-year average draw of -185 bcf.  As of January 26, nat-gas inventories were up +2.9% y/y and were +5.1% above their 5-year seasonal average, signaling ample nat-gas supplies.  In Europe, gas storage was 71% full as of January 29, above the 5-year seasonal average of 58% full for this time of year.

Baker Hughes reported Friday that the number of active U.S. nat-gas drilling rigs in the week ending February 2 fell -2 rigs to 117 rigs, just above the 2-year low of 113 rigs posted September 8.  Active rigs have fallen back since climbing to a 4-1/2 year high of 166 rigs in Sep 2022 from the pandemic-era record low of 68 rigs posted in July 2020 (data since 1987).

Published: 2/2/2024 5:01 AM ET | 

Gold held steady on Friday after climbing in the previous session on weak U.S. labor market data.

Spot gold was marginally lower at $2,054.28 per ounce, while U.S. gold futures were virtually unchanged at $2,071.10.

Gold prices were poised for their biggest weekly gain in nine weeks as the dollar softened, and bond yields dipped on weak U.S. labor market data.

U.S. jobless claims rose last week, and fourth quarter unit labor costs undershoot forecasts while business activity in the manufacturing sector continued to contract in January, separate reports showed on Thursday.

Despite the Fed’s hawkish tone, economists continue to believe it is a matter of “when, not if” the U.S. central bank will eventually lower rates.

By RTTNews Staff Writer   ✉  | Published: 2/2/2024 5:01 AM ET | 

Gold held steady on Friday after climbing in the previous session on weak U.S. labor market data.

Spot gold was marginally lower at $2,054.28 per ounce, while U.S. gold futures were virtually unchanged at $2,071.10.

Gold prices were poised for their biggest weekly gain in nine weeks as the dollar softened, and bond yields dipped on weak U.S. labor market data.

U.S. jobless claims rose last week, and fourth quarter unit labor costs undershoot forecasts while business activity in the manufacturing sector continued to contract in January, separate reports showed on Thursday.

Despite the Fed’s hawkish tone, economists continue to believe it is a matter of “when, not if” the U.S. central bank will eventually lower rates.

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CME Group’s FedWatch Tool currently indicates a relatively modest 37.5 percent chance of a March rate cut but a nearly 100 percent chance rates will be lower by early May.

The Labour Department is scheduled to release its more closely watched report on January employment later in the day.

Economists expect employment to increase by 180,000 jobs in January after an increase of 216,000 jobs in December.

The unemployment rate is expected to inch up to 3.8 percent from 3.7 percent.
U.S. University of Michigan’s consumer sentiment results for January and factory orders figures for December are also awaited.

| Published: 2/2/2024 4:49 AM ET | 

Oil ticked higher on Friday but headed for its biggest weekly loss since early November after reports that Hamas and Israel have come to an agreement on a ceasefire, a crucial step toward ending the conflict.

Benchmark Brent crude futures rose 0.4 percent to $79.04 per barrel, while WTI crude futures were up 0.4 percent at $74.14.

Traders closely watched the developments regarding negotiations of a cease-fire in the Israel-Hamas war.

The Gaza ruling group Hamas has finally given ‘greenlighted’ the ceasefire proposal and release of Israeli hostages, but talks are still in the early stages.

A weaker dollar lent some support to oil prices ahead of the all-important U.S. jobs report due later in the day.

Traders were also reacting to the OPEC+ decision to keep its oil output policy unchanged.

At an online review meeting on Thursday, the oil cartel signaled that it would maintain output cuts for the first quarter to avert a surplus amid easing global demand.

OPEC reaffirmed its “readiness to take additional measures at any time,” according to the Joint Ministerial Monitoring Committee, which will meet again on April 3.

Published: 2/1/2024 6:43 PM ET | 

The Canadian market shrugged off early weakness and ended on a firm note on Thursday, led by gains in materials, industrials, consumer sectors.

The benchmark S&P/TSX Composite Index ended with a gain of 97.33 points or 0.46% at 21,119.21. The index climbed to 21,189.26 in early trades, but dropped to 20,980.93 around late morning, but recovered gradually as the session progressed to eventually close well above the flat line.

Aritzia Inc (ATZ.TO) rallied 7.3%. Cameco Corporation (CCO.TO) and Sprott Inc (SII.TO) climbed 5.4% and 5%, respectively. Nutrien (NTR.TO) ended stronger by 3.8%.

Boyd Group Services (BYD.TO), Canadian Pacific Kansas City (CP.TO) and CGI Inc (GIB.A.TO) gained 2.4 to 3%. Franco-Nevada Corporation (FNV.TO), Canadian National Railway (CNR.TO), Thomson Reuters Corporation (TRI.TO), Waste Connections (WCN.TO), WSP Global (WSP.TO) and FirstService Corporation (FSV.TO) advanced 1 to 2%.

Shopify Inc (SHOP.TO) ended more than 4.5% down. MEG Energy Corp (MEG.TO), Westshore Terminals (WTF.TO), Tecsys Inc (TCS.TO) and Precision Drilling Corporation (PD.TO) declined 3.7%, 3.3% and 2.5%, respectively.

Canadian Natural Resources (CNQ.TO), Imperial Oil (IMO.TO), TFI International (TFII.TO) and Brookfield Corporation (BN.TO) also ended notably lower.

Rogers Communications Inc. (RCI.A.TO) gained 1.1%. The company reported adjusted net income of C$630 million for the quarter ended December 31, 2023, compared to adjusted net income of $554 million in the corresponding quarter of the previous year. The company announced that its Board of Directors declared a quarterly dividend totaling 50 cents per share on each of its outstanding Class B Non-Voting shares (“Class B Shares”) and Class A Voting shares.

Canada Goose Holdings Inc. (GOOS.TO) soared nearly 8% after reporting adjusted net income of $138.6 million or $1.37 per diluted share for the third-quarter, compared with an adjusted net income of $134.5 million or $1.27 per diluted share in the prior year period.

Real Matters Inc. (REAL.TO) tumbled 7%. The company reported first-quarter net loss of $3.6 million compared with a net loss of $4.6 million in the first quarter of the previous financial year.

On the economic front, a report from S&P Global showed an improvement in Canadian manufacturing activity. The S&P Global Canada Manufacturing PMI improved to 48.3 in January from 45.4 in the preivous month, marking the slowest contraction since October.

• Apple is facing renewed challenges in China, one of its most critical markets.
• Cautious consumer sentiment combined with intense competition, in particular from a rejuvenated Huawei, is posing a challenge to Apple.
• Other domestic brands from Xiaomi to Oppo have been slowly pushing into the high-end market but at cheaper prices, also challenging Apple.

Apple’s biggest issues in China right now after sales plunged (cnbc.com)

• Meta shares jumped on Friday after profit tripled in the fourth quarter and the company issued its first-ever dividend.
• Revenue rose 25% in the quarter for Meta, marking the fastest rate of growth for any period since mid-2021 as the online ad market rebounded.
• Investors praised Meta’s decision to issue a dividend, a rare step for a high-growth technology company.

Meta shares surge 20% on soaring profit, guidance and first dividend (cnbc.com)

Here’s where the jobs are for January 2024 — in one chart (cnbc.com)

Imperial Oil Ltd. raised its quarterly dividend by 20 per cent as it reported a fourth-quarter profit of $1.37 billion, down from $1.73 billion a year earlier.

The company says shareholders will now receive a quarterly dividend payment of 60 cents per share, up from 50 cents per share.

The increased payment came as Imperial reported its fourth-quarter profit amounted to $2.47 per diluted share for the quarter ended Dec. 31, down from a profit of $2.86 per diluted share a year earlier as it faced lower commodity prices.

Revenue and other income totalled $13.11 billion, down from $14.45 billion in the last three months of 2022.

The company says upstream production in the quarter averaged 452,000 gross oil-equivalent barrels per day, up from 441,000 in the same period a year earlier.

Refinery throughput averaged 407,000 barrels per day compared with 433,000 barrels per day in the fourth quarter of 2022, while capacity utilization was 94 per cent compared with 101 per cent a year earlier.

This report by The Canadian Press was first published Feb. 2, 2024.

OpenText Corp. says it earned US$37.7 million in its second quarter, down 85 per cent from US$258.5 million during the same quarter last year.

The company saw its operating expenses nearly double for the quarter, and was also hit with significantly higher interest and other related expenses.

The Waterloo, Ont.-based company says revenues for the quarter were US$1.5 billion, up from US$897.4 million a year earlier.

Earnings per diluted share were 14 cents US, up from 96 cents US a year earlier.

CEO Mark Barrenechea says OpenText remains on track to close the divestment of its AMC business to Rocket Software, Inc. in the fourth quarter of fiscal 2024.

Executive vice-president and chief financial officer Madhu Ranganathan says the company expects to bring recent acquisitionMicro Focus on to the OpenText operating model by the end of the fiscal year.

This report by The Canadian Press was first published Feb. 1, 2024.