Canadian Insight into the markets here and abroad

Markets Insight

Friday, March 27, 2020

Editor’s oil & gas markets analysis and weekly U.S. Energy Information Administration reports...

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The Irwing refinery in St. John, New Brunswick is Canada’s largest refinery. In peak production it produces 300,000 barrels per day of refined petroleum products. It makes high octane gasoline, low sulphur diesel, jet fuel, heating oil, motor gasoline, a variety of motor oils, asphalt, and propane. The Irwing refinery accounts from 40% of Canada’s petroleum exports.

Markets commentary for Friday  March 27, 202

Crude oil prices are down this morning; this is mainly due to the increase in coronavirus cases in the US and the gloomy oil prices forecast released by Goldman Sachs.

Brent crude oil dropped by 6.15% or $1.62 and bids are @ $24.72. WTI crude oil is down by 4.51% or $1.02 and bids @ $21.58.

There is a glimmer of hope that Russia and OPEC may reach a deal. Head of Russia’s Sovereign Wealth Fund, Kirill Dmetriev, said that countries should cooperate to cushion the economic blow from the coronavirus fallout.

Dmetriev and Russia’s Energy Minister Alexander Novak were the top negotiators in the previous production cut deal with OPEC. This agreement is about to expire on March 31, 2020.

Worldometers.info (www.worldometers.info/coronavirus/#countries ) reported this morning that U.S. Covid –19 cases has surpassed that of China and Italy with 85,906 reported cases. Yesterday U.S. was reported to be in third place.  This is very dismal news that will affect global economy.

 

 

 

Markets commentary for Thursday  March 26, 202

Alberta natural gas prices continue to hold up well despite lower demand due to warmer temperatures. Alberta natural gas spot prices ranged this week between $1.83  and $2.01 per gigajoule.

US Henry Hub natural gas futures are once again showing further weakness. Bids for April are down by $0.026 and at $1.63 per MMBtu, May bids are down $0.020 and at $1.694 per MMBtu, and June bids are down $0.018 and at $1.809 per MMBtu.

Energy Information Administration reported a slightly larger than anticipated drawdown. US natural gas inventories are still above the 5 year average.

EIA reported this morning that there was a drop of 29 billion cubic feet as of last Friday. Total working gas inventories were 2.005 trillion cubic feet. This is 88 billion cubic feet higher than a year ago and 292 billion cubic feet more than the five year average.

 

 

 

Markets commentary for Wednesday  March 25, 2020

Energy Information Administration released its weekly petroleum inventory report this morning. Report indicates an increase in crude oil and total petroleum inventories.  Gasoline, distillates, and propane inventories were down. Refineries decreased their operations as compared to the previous week.

Crude oil imports were down by 422,000 barrels per day and averaged at 6.1 million barrels per day. Four week average was 6.3 million barrels per day and 7% lower than the 4 week average last year.

US commercial inventories of crude oil increased by 1.6 million barrels and totaled at 455.4 million barrels. Storage volumes are 2% below the 5 year average.

Supplies of gasoline decreased by 6.2 million barrels. Distillates inventories decreased by 1.5 million barrels. Propane supplies decreased by 1.8 million barrels as compared to the previous week. Total petroleum inventories increased 2.4 million barrels last week.

US refineries increased their operations by 0.7% over the previous week and operated at 87.3% of their optimum operating capacity. Operations processed 15.8 million barrels per day, and produced 9 million barrels per day of gasoline and 4.8 million barrels of distillates daily.

 

 

 

Markets commentary for Tuesday  March 24, 2020

Crude oil markets begin the day with a bit of optimism and prices are up. Brent crude oil is up by 2.33%, or $0.63; bids are coming in at $27.66 per barrel. WTI crude oil is u by 0.43%, or $0.10; bids are at $23.46.

Investors are basing their optimism on the hope that US government will reach a deal on a $2 trillion aid package which could help alleviate the impact of the corona virus outbreak.

Analysts predict much uncertainty in the crude oil markets over the long term. It is difficult to tell the length and severity of the coronavirus pandemic. Oil markets are seriously oversupplied at present.

There is still no indication that Russia and Saudi Arabia will end their attempt to further flood the oil markets. Indications are that the two major oil producer will continue with their present policy in an attempt to increase their market share.

 

 

 

Markets commentary for Monday  March 23, 2020

Crude oil prices are down this morning to the lowest level since 2003. World wide spread of Covid-19 pandemic taking a toll on all commodity and stock markets.

Brent crude oil is down by 4.63% or $1.25 and bids are at $25.96 per barrel. WTI id down 0.71% and bids are at $22.79 per barrel.

Plunging demand and an economic downturn is sending markets more negative news and further uncertainty.

Canadian oil and natural gas companies are preparing for shutdowns as more and more cases of covid-19 increases. Federal government will be recalling parliament tomorrow to implement emergency legislation.

 

 

Markets commentary for Thursday  March 19, 2020

Colder than normal temperatures are maintain strong Alberta natural gas prices . Forecast predict a slow start to spring. Natural gas bids this week ranged from a low of $$1.90 per gigajoule to yesterday’s high of $$2.07 per gigajoule.

US Henry Hub natural gas bids this morning are up for the next nine months. April bids are up by $0.045 per MMBtu and selling at $1.649. May bids are up by $0.056 and selling at $1.70 per MMBtu. June bids are up by $0.063 and prices at $1.919 per MMBtu.

The coronavirus is having a major impact on all forms of energy around the globe. As the virus spreads, affected countries are implementing measures to contain infection. This is disrupting energy supplies and demand.

 

 

Markets commentary for Wednesday  March 18, 2020

Energy Information Administration released its weekly petroleum inventory report this morning. Report indicates an increase in crude oil inventories.  Gasoline, distillates, propane and total inventories were down. Refineries decreased their operations as compared to the previous week.

Crude oil imports were up by 127,000 barrels per day and averaged at 6.5 million barrels per day. Four week average was 6.4 million barrels per day and 4.5% lower than the 4 week average last year.

US commercial inventories of crude oil increased by 2.0 million barrels and totaled at 453.7 million barrels. Storage volumes are 2% below the 5 year average.

Supplies of gasoline decreased by 6.2 million barrels. Distillates inventories decreased by 2.9 million barrels. Propane supplies decreased by 300,000 barrels as compared to the previous week. Total petroleum inventories decreased 7.7 million barrels last week.

US refineries maintained their operations at the same level as last week and operated at 86.4% of their optimum operating capacity. Operations processed 15.8 million barrels per day, and produced 10 million barrels per day of gasoline and 4.7 million barrels of distillates daily.

 

 

 

Markets commentary for Tuesday  March 17, 2020

Crude oil prices seem to be stabilizing this morning. Brent crude oil is down by only 0.17% or $0.05 and bids are at $$30.00 per barrel. WTI oil prices are up by 1.05% or $0.30 and bids are at $29.00 per barrel.

Crude oil markets may have bottomed out as investors and traders are more optimistic that despite the corona virus pandemic, demand for crude oil and petroleum products will continue.

Throughout the world governments are taking the necessary actions to contain the coronavirus. Some nations have the necessary steps quickly and may escape the pandemic and a major setbacks to its economic growth.

Most financial analysts believe that Saudi Arabia and Russia cannot financially afford to continue to flood the globe with low priced oil. The economies of both nations will instill serious economic harm onto themselves as well.

 

 

 

Markets commentary for Monday  March 16, 2020

Crude oil prices continue to spiral down this morning as markets continue to enter further uncertainty. Spread of the coronavirus and its effect on the global economy is the major concern.

Brent crude oil was down by 10.84%, or $3.67 and trading at $30.18 per barrel. WTI crude oil is down 7.69% , or $2.44 and trading at 29.29 per barrel.

Alberta natural gas basis Calgary is holding at $2.18 per gigajoule. Nymex natural gas bids are down 2.03% and bids are coming in at $1.83 per MMBtu.

Crude oil markets face increasing global oil supplies and a decrease in oil demand .The Saudis and Russia stand fast that they will increase production and increase their oil exports at the end of the month.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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      WCS  / WTI

   Price Spread -$13.75

         March 27, 2020

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