Canadian Insight into the markets here and abroad
Tuesday, June 30, 2020
Editor’s oil & gas markets analysis and weekly U.S. Energy Information Administration reports...
Did you know?
The ancient people of Greece, Persia, and India discovered natural gas many centuries ago. These people were mystified by the burning springs created when lightning ignited natural gas seeping from cracks in the ground. They sometimes built temples around these eternal flames so they could worship the fire.
Markets commentary for Tuesday, June 30, 2020
Crude oil prices continue a downward trek as we exit out of the month of June. Brent crude oil down this morning by 1.44% and bids for August are at $41.11. WTI crude oil down by 0.53% and bids this morning at $39.49 per barrel.
Indications are that OPEC production is more oil than its collective agreed on quota. OPEC had agreed that it would make an additional cut of 1.25 barrels per day for the month of June. Data show that OPEC compliance was only at 87%.
Libya is preparing to enter the oil markets . It has been out of the oil exports since beginning of this year. The country’s civil war has abated and that nation is preparing to ship crude oil once again. This may add to the global oversupplies.
Investors will be watching this afternoon’s American Petroleum Institute US petroleum inventory estimates and tomorrow’s EIA petroleum inventory report. All markets in Canada will be closed tomorrow as Canadians observe the nations birthday.
We will not be publishing the remainder of this week.
Markets commentary for Monday, June 29, 2020
Commodity and stock markets taking a big hit after reports released that indicate a surge in covid-19 in Australia and US. Fear is that global economic recovery may be threatened. This has led to subdued trading.
Crude oil markets are surprisingly marginally up this morning. Brent crude oil is up by 0.19% and August future bids are at $41.10 per barrel. WTI crude oil is up by 0,65% and August bids are at $38.74 per barrel.
Despite the uptick in crude oil prices this morning, outlook for crude oil markets looks dismal. Demand for crude oil has been very slow to recover. Indications are that US crude oil inventories will continue to rise despite a sharp drop in production.
Some investors still have hopes that China may turn to aggressive buying in order to take advantage of oil prices and to build up a large inventory. This is all sheer speculation nad may not happen.
Markets commentary for Thursday, June 25, 2020
Alberta spot prices for natural gas holding up well for the past 10 days and prices have been rising for the past several days. Yesterday, at the end of the trading day, bids were $1.86 per gigajoule.
Henry Hub natural gas futures are all down this morning. July bids are down by $0.075 and bids at $1.525 per MMBtu. There are no bids above $2.00 per MMBtu until November; bids for that month are down by $0.037 and at $2.184 per MMBtu.
Crude oil prices are bouncing back this morning after dropping almost 5% following the release of EIA petroleum inventory report. Brent crude oil bids for August are up by 1.41% and at $40.88 per barrel. WTI crude oil is up by 1.29% and bids for August are at $38.50 per barrel for August delivery.
Markets commentary for Wednesday, June 24, 2020
Energy Information Administration released its weekly petroleum inventory report this morning. Report indicates an increase in crude oil, distillates, propane and total inventories. Gasoline inventories were down. Refineries increased their operations, once again, as compared to the previous week.
Crude oil imports decreased by 102,000 barrels per day and averaged at 6.5 million barrels per day. Four week average was 6.6 million barrels per day and 11.6% lower than the 4 week average last year.
US commercial inventories of crude oil increased by 1.2 million barrels and totaled at 540.7 million barrels. Storage volumes are 16% above the 5 year average.
Supplies of gasoline decreased by 1.7 million barrels. Distillates inventories increased by 249,000 barrels. Propane supplies increased by 2.4 million barrels as compared to the previous week. Total petroleum inventories increased 3.9 million barrels last week.
US refineries increased their operations by 1.5% over the previous week and operated at 73.1% of their optimum operating capacity. Operations processed 13.8 million barrels per day, and produced 8.8 million barrels per day of gasoline and 4.6 million barrels of distillates daily.
Markets commentary for Tuesday, June 23, 2020
Crude oil markets continue to ride the hope of optimism and make further gains this morning. Brent crude oil rose by 1.86% while WTI was up by 2.06%.
Brent crude oil futures bids for August were at $43.79 per barrel and WTI bids for August were at $41.49 per barrel.
US President Trump has reassured the markets that the trade agreement with China is still intact and could be easily finalized. US President stated that he is certain that China will agree to his terms.
Investors will continue to focus on US petroleum inventories data to be released tomorrow morning. Latest rise in global covid-19 cases is also of much concern.
Markets commentary for Monday, June 22, 2020
Crude oil markets on the more positive note with WTI and Brent crude oil making some modest gains. Brent crude oil is up by 0.38% and WTI crude oil up by 0.10%. August bids for Brent crude oil at $42.35 per barrel. July bids for WTI crude oil at $39.78 per barrel.
Indications are that there is a renewed strength for crude oil markets. Refiners and traders are showing a more keen interest in crude oil future contracts.
WTI crude oil rose above $40 per barrel on Friday. This is the first time in over two months that crude oil prices were at that mark. Analyst see this as a turning point as many nations are leaving the pandemic lockdown. Crude oil demand is expected to slowly increase. Presently, oil consumption is estimated to be 15% below normal.
Markets commentary for Thursday, June 18, 2020
Alberta natural gas basis Calgary has dropped from $1.78 per gigajoule as of last week to $1.68 per gigajoule as of closing yesterday.
Bids for US Henry Hub natural gas futures for July are $1.653 per MMBtu and $1.741 per MMBtu for August. Future bids remain under $2 per MMBtu until November. Bids for that month are $2.318 per MMBtu.
Alberta and Canadian natural gas prices have been holding up well in comparison to US natural gas prices. Historically, summer natural gas prices are much lower during the summer months in Canada and US.
In the coming months, expect natural gas demand to increase as oil sands development gets restarted. This in turn will bolster Alberta based natural gas prices.
Markets commentary for Tuesday, June 16, 2020
Crude oil markets starting the day on a more positive note. Brent c rude oil is up by 1.54% and bids this morning are at $40.33 per barrel for the month of August. WTI crude oil is up by 1.32% and bids are at $37.61 per barrel for the month of July.
Commodity and oil markets are up today as investors are anticipating a boost to revive the American economy. President Trump is expected to announce that the federal government will spend $1 trillion on infrastructure work.
President Trump is pushing a new infrastructure plan in hope of increasing his popularity and winning the upcoming election in November.
Markets commentary for Monday, June 15, 2020
Crude oil prices begin the week on a downward trek. Brent crude oil is down this morning by0.13% and bids at $38.68 for the month of August. WTI crude oil is down by 1.27% and July bids are at $35.80.
Investors looking at several negative factors which can affect the global economy and derail the global economy.
There is fear on the trading floors that a second wave of the covid-19 pandemic is near. There have been a surge of cases in Europe and the US.. This could possibly inflict lasting damage on the global and American economy.
On the more positive side for crude oil prices, Saudi Arabia is showing that it is serious about cutting its output this month. The Saudis have slashed seven oil contracts to Asian buyers by as much as 40%.
WCS / WTI
Price Spread ↑-$9.50
June 30, 2020
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