Canadian Insight into the markets here and abroad

Markets Insight

Thursday, May 16, 2019

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. 

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Markets commentary for Thursday, May 16, 2019

Alberta natural gas prices hovering near $2.36 per gigajoule. Alberta based natural gas prices have been steady since the second week in May. Cool spring temperatures have maintained an unexpected heating demand. Forecasts indicate continued below temperatures until first part of June through most of Canada.

Henry Hub natural gas futures for June are up by 3.2 cents and are trading at $2.633 per MMBtu. October futures are at $2.706 per MMBtu and $2.778 per MMBtu for November.

US natural gas prices continued to be depressed despite a very cool spring. This has extended heating season in northwest, central and northeastern US. This has extended the heating season and created an estimate 11% increase in heating demand.

EIA reported its US working gas storage inventory report. Indications are that despite the cool weather, US working gas inventories rose by 106 billion cubic feet. Total working gas inventories reached 1.653 trillion cubic feet. This is 130 billion cubic feet above last years supplies and 286 billion cubic feet below the five year average.

 

 

Markets commentary for Wednesday, May 15, 2019

Energy Information Administration released its weekly petroleum inventory report this morning. Data indicates a decrease in crude oil inventories. Gasoline and propane inventories were up while distillates and total inventories were down . Refineries decreased their operations marginally

Crude oil imports were up by 919,000 barrels per day and averaged at 7.6 million barrels per day. Four week average was 7.2 million barrels per day and 9.6 % lower than the 4 week average .

US commercial inventories of crude oil increased by 5.4 million barrels and totaled at 472.0 million barrels. Storage volume are at a five year average.

Supplies of gasoline decreased by 11 million barrels. Distillates inventories increased by 0.1 million barrels. Propane supplies increased by 2.8 million barrels. Total petroleum inventories increased by 14.6 million barrels as compared to the previous week.

US refineries increased their operations by 1.6%  and operated at 90.5% of their optimum operating capacity. Operations processed 16.7 million barrels per day, and produced 9.9 million barrels per day of gasoline and 5.3 million barrels of distillates daily.

 

Markets commentary for Tuesday, May 14, 2019

Crude oil prices oil prices continue to rise despite a dismal outlook that the China and US trade dispute will likely continue into the coming months.

Saudi Arabia announced this morning that two of its pumping stations on its East West pipeline were attacked by armed drones. The attack caused a fire with some damage to the pumping station. 

The East West pipeline carries crude oil from eastern Saudi Arabia to a tanker loading terminal at the port of Yanbu. The pipeline was closed in attempt to minimize a possible serious damage.

On Monday, the Saudis reported that two oil tankers were attack and sustained severe damage. It is believed that both attacks were done by Houthi militants which are backed by Iran.

These attacks have the potential to cause oil shortages in certain regions which could lead to a crude oil price spike.

 

Markets commentary for Monday, May 13, 2019

WTI an d Brent crude oil prices are up in early morning trading. Global uncertainty, political global tensions and a possible conflict between Iran and US is at the markets frontline.

The US and China standoff is also causing investors to be cautious. What once appeared to be a possible agreement between the two nations appears to be far from a possibility.

Saudi Arabia announced this morning that two of its oil tankers were damaged by sabotage attacks while the vessels were near United Emirates coastline.  Saudi reports are that the two tankers received severe damage.

US has warned shipping companies of the dangers in the Persian Gulf. US has now sent an aircraft carrier with B2 bombers to the region. It is believed that the possible treats are coming from Iran.

 

 

Markets commentary for Friday, May 10, 2019

Crude oil prices taking a toll as President Trump intensifies the trade war between US and China. US government has increased a number of tariffs against  a variety of Chinese imports.

The trade war between the two has clouded the economic global growth and crude oil demand. What looked like a certainty in a trade agreement between the two only a week ago, is now up in the air.

The US government is banking on China caving into US demands and signing an agreement with US. It appears that this is not about to happen as China has stated that it will retaliate and reciprocate with a number of tariffs on US goods.

Crude oil traders and investors will be keeping a close watch on global events and crude oil supplies. Oil markets could become volatile in the upcoming weeks.

 

 

Markets commentary for Thursday, May 9, 2019

Natural gas prices took a sudden leap this week with prices based Calgary at $2.53 per gigajoule. Home heating is continuing to cause an unexpected demand due to cooler than normal spring weather.

US Henry Hub natural gas prices have continued to slump. Futures for June are $2.572 per MMBtu; September futures are trading at $2.627 per MMBtu. November natural gas prices in November are trading at $ 2.736 per MMBtu.

US natural gas prices are reacting to past several weeks which showed rising inventories.  EIA reported natural gas stocks rose by 85 Bcf last week, and increased to 1,547 Bcf from 1,462 Bcf. This is 9.0% above the 1,419 Bcf that was in storage at this point last year and is 16.4% below the five-year average of 1,850 Bcf. This week’s storage build has slightly exceeded expectations, as analysts predicted a build of 114 Bcf.

 

 

Markets commentary for Wednesday, May 8, 2019

Energy Information Administration released its weekly petroleum inventory report this morning. Data indicates a decrease in crude oil inventories. Gasoline and propane inventories were up while distillates and total inventories were down . Refineries decreased their operations marginally

Crude oil imports were down by 721,000 barrels per day and averaged at 6.7 million barrels per day. Four week average was 6.8 million barrels per day and 15.6 % lower than the 4 week average .

US commercial inventories of crude oil decreased by 4.0 million barrels and totaled at 466.6 million barrels. Storage volume are at a five year average.

Supplies of gasoline increased by 0.6 million barrels. Distillates inventories decreased by 0.2 million barrels. Propane supplies increased by 1.2 million barrels. Total petroleum inventories decreased by 1.7 million barrels as compared to the previous week.

US refineries decreased their operations marginally and operated at 88.9% of their optimum operating capacity. Operations processed 16.4 million barrels per day, and produced 10.1 million barrels per day of gasoline and 5.1 million barrels of distillates daily.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      WCS  / WTI

   Price Spread -$18.65

         May 16, 2019

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