Canadian Insight into the markets here and abroad
Monday, January 18, 2021
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. Burning springs were created when lightning ignited natural gas seeping from cracks in the ground. Early civilizations built temples around these eternal flames so they could worship the fire.
Markets commentary for Monday, January 18, 2021
All crude oil and natural gas prices are down this morning. News has filtered that President-elect Joe Biden will cancel Keystone XL pipeline permit on his first day in office. This will have serious implications in Canada and US oil industry and possibly global oil markets.
Brent crude oil futures for March are down by 0.24% and bids this morning are $54.97 per barrel. WTI crude oil futures for February are down 0.11% and bids this morning $52.30 per barrel. WCS spot prices, basis Hardisty, Alberta, $41.66 per barrel.
Indications are that global crude oil inventories are once again rising after being almost balanced. Rising covid numbers throughout the world having an affect on energy demand and particularly crude oil. Last week, reports filtered from China that several cities in western China are in a lockdown.
It appears that the vaccine developed by Chinese labs is a bust and only 50% effective. Another wave of the coronavirus pandemic, may have serious effects on the Chinese economy.
Markets commentary for Friday, January 15, 2021
Commodity markets continue to slide on several negative factors, crude oil is included. There is more interest in natural gas futures as forecasts indicate colder Arctic air mass moving south in the next ten days.
Brent crude oil futures for March is down by 2.64% and bids this morning @ $54.93 per barrel. WTI crude oil futures for February down by 3.02% and bids this morning @ $51.95 per barrel. Nymex Natural gas futures for February up by 3.30% and bids this morning at $2.75 per MMBtu.
News is filtering from China that another wave of covid-19 infections is forcing the government to invoke another lockdown in some centers. This is tempering the oil markets as investors fear that China’s demand for crude oil will drop once again.
Markets commentary for Thursday, January 14, 2021
Most commodity markets down this morning, crude oil and natural gas included. Brent crude oil futures for March down by 1.09% and bids this morning @ $55.45 per barrel. WTI futures for February down by 0.59% and bids this morning @ $52.60 per barrel. WCS differential is shrinking and spot prices @ $41.61 per barrel.
Alberta natural gas spot prices basis Calgary are on an upward trek once again. The week began with prices at $2.57 per gigajoule and now bids are at $2.80 per gigajoule.
US natural gas bids, as per NYMEX, $2.74 per MMBtu for February. Henry Hub natural gas futures for February, as of this morning, @ $2.703 per MMBtu.
Latest import data shows that US crude oil imports from Saudi Arabia are now down to zero. Previously, US crude oil imports ranged in several hundred thousand barrels per day to as much as 1.6 million barrels per day which occurred in 2016.
Outlook for the near future is expected that US crude oil imports from Persian Gulf exporters will become non-existent. If and when the Keystone XL pipeline is completed, Canada will become the main suppler for US Gulf refineries.
Markets commentary for Wednesday, January 13, 2021
Energy Information Administration released its weekly petroleum inventory report this morning. Report indicates that crude oil, propane and inventories are down. Gasoline, and distillates inventories are up. Refineries increased their operations as compared to the previous week.
Crude oil imports increased by 0.9 million barrels per day and averaged at 6.2 million barrels per day. Four week average was 5.6 million barrels per day 14.9% less than the 4 week average last year.
US commercial inventories of crude oil decreased by 3.2 million barrels and totaled at 482.2 million barrels. Storage volumes are 11 % above the week average a year ago.
Supplies of gasoline increased by 4.4 million barrels. Distillates inventories increased by 4.8 million barrels. Propane supplies decreased by 6.7 million barrels. Total petroleum inventories decreased 1.7 million barrels as compared to last week.
US refineries increased their operations by 1.3% over the previous week and operated at 82.0% of their optimum operating capacity. Operations processed 14.7 million barrels per day, and produced 7.5 million barrels per day of gasoline and 4.7 million barrels of distillates daily.
Markets commentary for Tuesday, January 12, 2021
Crude oil markets bouncing back this morning on bits of optimism. Data indicates that global crude oil supplies may be close to being balanced despite renewed lockdowns.
Brent crude oil futures for March up by 1.37% and bids this morning at $56.42 per barrel. WTI crude oil futures for February up by 1.34% and bids this morning at $52.95 per barrel. WCS bids for February discounted by $14.92 as compared to WTI crude oil.
Latest report from Deloitte Canada says that crude oil demand and prices will bounce back to pre-covid pandemic times. It foresees economies reopening and recovering as mass immunization occurs. Deloitte believes that the price spread between WTI and WCS crude oil will widen due to lack of pipeline to transport Canadian crude oil to markets.
Markets commentary for Monday, January 11, 2021
Crude oil markets recede as investors are once again reflect on the problems facing the global economies. Corona virus infection numbers continue to rise and immunization is off to a very low start. Most of Europe is entrenched by a Polar Vortex bringing very cold temperatures. In US, President Trump is once again facing impeachment proceeding with only nine days before his presidential term expires.
Brent crude oil is down by 0.66% and March futures bid this morning are $45.47 per barrel. WTI crude oil futures for February are down 0.52% and bids this morning are $51.97 per barrel. WCS crude oil crude oil futures are discounted by $14.92 per barrel as compared to WTI crude oil.
Markets commentary for Friday, January 8, 2021
Crude oil prices continue to rise on hopes that global demand will rise while global output drops. Presently, spot demand has risen.
Brent crude oil futures for March up 1.89% and bids this morning at $55.41 per barrel. WTI crude oil futures for February up 1.59% and bids this morning at $51.64 per barrel. WCS crude oil futures for February are discount by $15.15 per barrel over WTI crude oil.
Investors are beginning to believe that covid vaccines will continue to increase immunization throughout the world. As economies improve and reopen, the effects from the pandemic will disappear.
WCS / WTI
Price Spread ↓-$14.92 January 18, 2021
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