Canadian Insight into the markets here and abroad
Thursday, November 21, 2019
Editor’s oil & gas markets analysis and weekly U.S. Energy Information Administration reports...
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Present technological advancements have cut Greenhouse Gas Emissions from oil sands production by 39 percent compared to 1990 levels. Canadian federal and Alberta’s provincial governments have implemented an accelerated research and development of improving bitumen extraction efficiency.
Markets commentary for Thursday, November 15, 2019
Alberta natural gas prices continue to be strong; prices this week began at $2.57 per gigajoule and as of closing yesterday, rose to $2.74 per gigajoule. Average price for November is $2.645 per gigajoule.
Analysts predict that Alberta natural gas demand is expected to be strong as there will be an increased demand in bitumen production, deep into 2020. Present Alberta working gas storage inventories are at the lowest level in 20 years.
Analysts predict that if Alberta natural gas production does not increase, domestic demand may force natural gas exports to US Mid-west to be restricted or even cease.
US Henry Hub natural gas future prices for December are down by $0.002 and trading at $2.557 per MMBtu. January prices were down by $0.005 and trading at $2.606 per MMBtu.
EIA working gas inventory data shows US working gas inventories decreased by 94 billion cubic feet and as of last Friday was 3.638 trillion cubic feet. This is 506 billion cubic feet higher than last year and 60 billion cubic feet below the five year average.
Markets commentary for Wednesday, November 14, 2019
Energy Information Administration released its weekly petroleum inventory report this morning. Report indicates a small increase in crude oil inventories. Gasoline inventories were up while distillates, propane and total inventories were down. Refineries increased their operations for the fourth week.
Crude oil imports were up 222,000 barrels per day and averaged at 6.0 million barrels per day. Four week average was 6.1 million barrels per day and 18.0 % lower than the 4 week average last year.
US commercial inventories of crude oil increased by 1.4 million barrels and totaled at 450.4 million barrels. Storage volumes are 3% above the 5 year average.
Supplies of gasoline increased by 1.8 million barrels. Distillates inventories decreased by 1.0 million barrels. Propane supplies decreased by 3.4 million barrels. Total petroleum inventories decreased by 5.0 million barrels as compared to the previous week.
US refineries increased their operations by 1.7 % and operated at 89.5% 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.
Markets commentary for Tuesday, November 19, 2019
WTI crude oil prices were down by 0.5% and trading at $56.81 in early morning trading. There was a small turnaround yesterday afternoon. Investors are still being confused as to the market direction.
Some analysts are still predicting that crude oil futures are bound to rise. This is on the pretence that global economy will improve and crude oil demand will rise.
There are indications that Russia is intending to increase its market share of crude oil . During the past several years it has been cooperating with OPEC and has refrained from exceeding its agreed to quotas.
OPEC will be holding its annual meeting in the first part of December. The cartel will once again review the oil market situation and set its export quotas for 2020.
Markets commentary for Monday, November 18, 2019
Brent and WTI crude oil prices were down in early morning trading. This is due to several determining factors. The main being, failure for US and China to reach a trade agreement .
During the past week, there was optimism that a trade agreement was about to be reached. We are now finding out this is far from the truth. As a result, crude oil contracts for the beginning of the week have slipped below two month highs.
Latest data indicates that Saudi Arabia’s crude oil exports during the month of September fell by 3%. This is attributed to the drone attacks on Saudi oil facilities.
Baker Hughes reported on Friday that US crude oil rig count has dropped for the forth consecutive week. Rig data indicates a drop of 10 rigs for a total of 674.
Markets commentary for Friday, November 15, 2019
Alberta natural gas prices continued to show resilience and prices this week traded between $2.33 and $2.64 per gigajoule.
Henry Hub natural gas prices were down marginally this week and traded at $2.641 per MMBtu for December and $2.707 per MMBtu for January.
National Energy Board of Canada has approved natural gas distribution prices which will begin from January 1, 2020. Average natural gas prices will go up by 4%.
Calgary based company, Crescent Point Energy, announced that it is selling its natural gas facilities and two pipelines in Saskatchewan for $500 million.
It appears that Crescent Point Energy is divesting its natural gas assets in Saskatchewan and investing in Duvernay oil plays in central Alberta.
Markets commentary for Thursday, November 14, 2019
Energy Information Administration released its weekly petroleum inventory report this morning. Report indicates a small increase in crude oil inventories. Gasoline inventories were up while distillates, propane and total inventories were down. Refineries increased their operations for the third week.
Crude oil imports were down 327,000 barrels per day and averaged at 5.8 million barrels per day. Four week average was 6.1 million barrels per day and 18.8 % lower than the 4 week average last year.
US commercial inventories of crude oil increased by 2.2 million barrels and totaled at 449.0 million barrels. Storage volumes are 2 % above the 5 year average.
Supplies of gasoline increased by 1.9 million barrels. Distillates inventories decreased by 2.5 million barrels. Propane supplies decreased by 2.5 million barrels. Total petroleum inventories decreased by 5.9 million barrels as compared to the previous week.
US refineries increased their operations by 1.8 % and operated at 87.8% of their optimum operating capacity. Operations processed 15.9 million barrels per day, and produced 10.2 million barrels per day of gasoline and 5.0 million barrels of distillates daily.
Markets commentary for Wednesday, November 13, 2019
WTI and Brent crude oil prices were down as it appears that China and US as still worlds apart in reaching a trade agreement. Last week, President Trump echoed that the trade agreement was near, but it now appears as hollow words.
API will announce its weekly petroleum estimates this afternoon and EIA will be releasing its weekly petroleum inventory report tomorrow morning. Most analysts speculate that US crude oil inventories will rise once again. This would be the third consecutive week if this occurs.
This year, US was making historical inroads into crude oil and refined petroleum exports. It now appears, that due to the global economic slowdown, US petroleum exports have hit a snag and are slowing down.
The Keystone XL pipeline has reopened after being shutdown following a spill two weeks ago in North Dakota. Canadian crude oil shipments through that pipeline will once again resume. Expect CSW crude oil margins to show some signs of pulling back.
Markets commentary for Tuesday, November 12, 2019
Crude oil prices continued to be steady for the second day of this week. Investors are waiting to see any possible developments in the US and China trade talks. WTI crude oil prices have been hovering above $57 per barrel.
Investors are keeping a very keen eye on trade talks, US crude oil inventories and any developments which may determine future oil demand.
Iran announced on the weekend that it has discovered a new major oil field. Initial estimate state that it may contain 53 billion barrels of crude oil.
The new Iranian oil discovery is the second largest for that nation. Previous discoveries estimated were at 65 billion barrels. If the new discovery is correct in its estimate, this could catapult Iran into a major oil producer.
Markets commentary for Friday, November 8, 2019
Latest data from China indicates that nation’s crude oil imports have sky rocked to a new historical high. China’s oil imports increased this year by 17%.
General Administration of Customs data shows that during October China’s crude oil imports averaged 10.76 million barrels per day. This is 10.5% over last years oil imports during the same period.
China’s crude oil imports are expected to continue to increase in the final quarter of 2019. Historical data shows that China’s oil imports increase in the final two months of each year.
It is interesting to note, that China is increasing its processed and refined petroleum products. China exported 11.07 million tonnes of motor gasoline, 16.36 million tonnes of distillates and 12.51 million tonnes of jet fuel in January to September period.
WCS / WTI
Price Spread ↓-$18.60
November 21, 2019
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