Canadian Insight into the markets here and abroad
Thursday, October 29, 2020
Editor’s oil & gas markets analysis and weekly U.S. Energy Information Administration reports...
Did you know?
Saskatchewan’s Birdbear formation located in southeastern portion of the province has produced heavy oil since 1968. The recent application of horizontal drilling and new fracturing technology has resulted in a significant increase in heavy oil production. Most horizontal wells in the area have out-produced conventional vertical wells by 3000%. This has added considerable interest to Saskatchewan’s two main heavy oil regions.
Markets commentary for Thursday, October 29, 2020
Crude oil and natural gas market in the US are all down this morning. Brent crude oil futures for December dropped by 3.25% and bids this morning at $37.85 per barrel. WTI futures for December are down by 3.40% and bids this morning are at $36.12 per barrel. Nymex natural gas is down by 0.76% and bids for December are $3.28 per MMBtu.
Alberta natural gas prices are down from this weeks high of $3.09 per gigajoule to $3.01 per gigajoule. There is still optimism in the Canadian natural gas fields, much different than in the oil patch.
Commodity and stock markets are reacting negatively due to the strong possibilities that Joe Biden and the Democrats could form the new government. Biden has repeatedly stated that green energy will replace al hydrocarbon fuels by 2050.
Markets commentary for Wednesday, October 28, 2020
Energy Information Administration released its weekly petroleum inventory report this morning. Report indicates an increase in crude oil and propane. There was a decrease in gasoline, distillates and total inventories . Refineries increased their operations as compared to the previous week.
Crude oil imports increased by 0.5 million barrels per day and averaged at 5.7 million barrels per day. Four week average was 5.5 million barrels per day 13.1% less than the 4 week average last year.
US commercial inventories of crude oil increased by 4.3 million barrels and totaled at 492.4 million barrels. Storage volumes are 11% above the week average a year ago.
Supplies of gasoline decreased by 0.9 million barrels. Distillates inventories decreased by 4.5 million barrels. Propane supplies increased by 0.1 million barrels. Total petroleum inventories decreased by 3.9 million barrels as compared to last week.
US refineries increased their operations by 1.7% over the previous week and operated at 74.6% of their optimum operating capacity. Operations processed 13.4 million barrels per day, and produced 9.1 million barrels per day of gasoline and 4.1 million barrels of distillates daily.
Markets commentary for Tuesday, October 27, 2020
Crude oil prices making a slight gain this morning but far from recovering its losses of the past few days. Brent crude oil up by 0.82% and bids for December futures at $40.79 per barrel. WTI crude oil up by 1.06% and December bids at $39.97 per barrel.
The small gains in crude oil markets are due to several positive factors. One is newly released China’s economic data which showed a turnaround. Indications are that industrial recovery has already started. This has been inspired by an increase in foreign investment capital.
There is also some optimism that US economy may get the necessary boost with a possible US stimulus package. There are indications the stalled legislation could still be revived and release a $2 trillion aid package.
Markets commentary for Monday, October 26, 2020
Crude oil prices continue to spiral down as the new week begins. Brent crude oil is down by 3.3% and bids for December are $40.39 per barrel. WTI futures for December are down by 3.46% and bids this morning are $38.47 per barrel.
US natural gas prices continue to enjoy their bullish ride. Nymex bids for November are up by 2.46% and bids are at $3.04 per MMBtu. Spot prices for Alberta natural gas basis Calgary are at $3.09 per gigajoule.
Crude oil markets continue to be under pressure as global crude oil inventories continue to rise. Increasing corona virus cases in Europe and United Sates is out-weighing any positive news.
Markets commentary for Friday, October 23, 2020
Crude oil prices are down marginally this morning as investors review several factors which may have a significant impact of the future of the oil and gas industry.
Should the US Democratic Party win the election, it is obvious that there will be dramatic changes in the energy industry. The renewable energy will become the real winner at the expense of the oil and gas industry.
China’s top government officials will gather next week in determining and planning the future of the communist state. They will attempt to hammer out an economic blueprint for the future.
China’s policy makers will be focusing on a more self reliant domestic economy and less dependant on global trade.
Markets commentary for Thursday, October 22, 2020
Crude oil and natural gas prices are up this morning. Crude oil markets buoyed by yesterday’s US petroleum inventory report showing decreases across the whole board.
Brent crude oil up by 1.44% and December bids at $42.33 per barrel. WTI crude up by 1.56% and December bids at $4.58 per barrel.
Alberta natural gas market riding a high. An early snowfall and much colder than normal weather has spurred an unexpected demand for heating fuel and natural gas. Alberta natural gas prices this week have spiked to $3.09 per gigajoule.
US natural gas prices are riding a high as well. Prices have risen to over $3 per MMBtu on the Nymex. Henry Hub futures for February have surged to $3.392 per MMBtu.
WCS / WTI
Price Spread ↓-$10.35. October 29, 2020
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