We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Imperial Oil Ltd. (IMO - Free Report) recently trimmed capital spending for the current year owing to the outbreak of novel coronavirus and sudden oil price slump. The ongoing global pandemic has dented global energy demand amid the price war between Russia and Saudi Arabia. Oil prices have plunged more than 65% since January 2020 to $20s a barrel. Moreover, prospects for the prices to recover appear dim.
Further, the Canadian oil market is in complete disarray, which adds to the woes. Heavy Canadian crude, which usually trades at a discount to U.S. West Texas Intermediate oil, seems to be sinking after the country’s oil-sands producers were required to suspend maintenance activity, thereby choking the market with a possible supply glut. The price of Heavy Canadian crude collapsed to a record low of less than $10 a barrel recently.
Following in the footsteps of other oil Canadian energy giants, namely Suncor Energy (SU - Free Report) , Cenovus Energy (CVE - Free Report) and Canadian Natural Resources (CNQ - Free Report) , Imperial Oil has trimmed its capital expenditure guidance for the current year by C$500 million to C$1.1-C$1.2 billion from the prior projection of C$1.6-C$1.7 billion. It has further identified opportunities to cut operating costs by C$500 from 2019 levels. The company has also suspended the share buyback program to weather the current oil price woes.
In view of the weak oil demand scenario, it aims at reducing the planned second-quarter turnaround work at its Sarnia site. It has deferred a planned coker turnaround at the Syncrude facility in Western Canada until the third quarter, while continuing to assess other planned shutdowns across the business.
Imperial Oil expects the current business environment to negatively impact upstream production, downstream refinery utilization and product sales. The company is re-modelling strategies to maintain the balance sheet, so that it can sustain payout and offer attractive returns to its shareholders.
About the Company
Founded in 1880, Calgary-based Imperial Oil is one of the largest integrated oil companies of Canada, mainly engaged in oil and gas production, petroleum products refining and marketing and chemical business. It is Canada’s largest jet fuel supplier and a major producer of asphalt. The company currently carries Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
Image: Bigstock
Imperial Oil (IMO) Slashes 2020 Capex Amid Depressed Prices
Imperial Oil Ltd. (IMO - Free Report) recently trimmed capital spending for the current year owing to the outbreak of novel coronavirus and sudden oil price slump. The ongoing global pandemic has dented global energy demand amid the price war between Russia and Saudi Arabia. Oil prices have plunged more than 65% since January 2020 to $20s a barrel. Moreover, prospects for the prices to recover appear dim.
Further, the Canadian oil market is in complete disarray, which adds to the woes. Heavy Canadian crude, which usually trades at a discount to U.S. West Texas Intermediate oil, seems to be sinking after the country’s oil-sands producers were required to suspend maintenance activity, thereby choking the market with a possible supply glut. The price of Heavy Canadian crude collapsed to a record low of less than $10 a barrel recently.
Following in the footsteps of other oil Canadian energy giants, namely Suncor Energy (SU - Free Report) , Cenovus Energy (CVE - Free Report) and Canadian Natural Resources (CNQ - Free Report) , Imperial Oil has trimmed its capital expenditure guidance for the current year by C$500 million to C$1.1-C$1.2 billion from the prior projection of C$1.6-C$1.7 billion. It has further identified opportunities to cut operating costs by C$500 from 2019 levels. The company has also suspended the share buyback program to weather the current oil price woes.
In view of the weak oil demand scenario, it aims at reducing the planned second-quarter turnaround work at its Sarnia site. It has deferred a planned coker turnaround at the Syncrude facility in Western Canada until the third quarter, while continuing to assess other planned shutdowns across the business.
Imperial Oil expects the current business environment to negatively impact upstream production, downstream refinery utilization and product sales. The company is re-modelling strategies to maintain the balance sheet, so that it can sustain payout and offer attractive returns to its shareholders.
About the Company
Founded in 1880, Calgary-based Imperial Oil is one of the largest integrated oil companies of Canada, mainly engaged in oil and gas production, petroleum products refining and marketing and chemical business. It is Canada’s largest jet fuel supplier and a major producer of asphalt. The company currently carries Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>