Official (Alberta) Oil Discussion Thread

[Bunk]

WTI at $66 and rising, seems fairly significant. Is this price escalation going to sustain? Admittedly, my knowledge of oil markets is somewhere between nothing and very little.

[Lubicon]

Originally Posted by DiracSpike

They have a better chance of convincing a governor to change their mind than the president? The president needs to be mindful of the full weight of USA Canada trade relations, the governor can just demagogue on one issue and not care about any of the larger ramifications.

No, the big difference is this would effect the part of Canada that matters. Just like SNC, just like the aluminum tariffs, just like the handwringing during the USMCA over the auto industry. It's absolutely inarguable.

I think there's a decent chance here for a Line 5 win and still allow all three leaders (Trudeau, Biden, and the Michigan Governor) to look okay. Right now we have a State Government vs. private industry. The pipeline benefits not only Canada but also a good chunk of Michigan so it's crucial to both economies. Trudeau can intervene at the federal level and talk to Biden who (presumably) could persuade Michigan to back down. I have to think federal > state would prevail.

Trudeau wins by:
Protecting Canada's interests (west and central)
Environmentally is not building a new pipeline, it's keeping status quo so he doesn't have to worry about flack from his left

Biden winds by:
Also not adding to the fossil fuel thing, he's keeping the status quo. He's also protected from his left.
A win in foreign relations

Michigan Governor wins by:
Looking like she is trying to shut the line down
Gains by playing the 'I tried' card, overruled by the big bad Feds.
Doesn't harm her own State's economy which a shutdown would do.

Everyone gets something they can benefit from without having to give up much.

[burn_this_city]

Originally Posted by Bunk

WTI at $66 and rising, seems fairly significant. Is this price escalation going to sustain? Admittedly, my knowledge of oil markets is somewhere between nothing and very little.

It looks like it should sustain for a little while. OPEC is still sitting on a boatload of spare capacity, but seem to be managing the market tightly. Some of it is optimism about reopening, but there's also concern that the market will be tight in the coming years due to underinvestment.

Everyone is still waiting for the rug pull, but by all indications things are sitting pretty solid for now.

[Lubicon]

Originally Posted by Bunk

WTI at $66 and rising, seems fairly significant. Is this price escalation going to sustain? Admittedly, my knowledge of oil markets is somewhere between nothing and very little.

To me it depends on two things:
1. what OPEC does in response. But right now they seem pretty supportive of keeping prices in this neighborhood so maybe they don't jack up production.
2. how quickly the world economy rebounds from Covid. A quicker than expected recovery will put a squeeze on supply which would certainly support current pricing levels (or even raise them).

Bigger question for me is can Canada take advantage of these prices? Industry has been in the toilet for going on 7 years now, I don't know how quickly we can respond. The service side has been absolutely gutted. Even if Operators wanted to ramp up (drilling etc.) there probably isn't the equipment or manpower to do so. Oilsands would be better able to take advantage as their infrastructure is still in place. Taking my employer as an example. This winter was really good for us activity wise but we were at about 25% of our activity levels compared to when I started here 10 years ago. And it was an absolute struggle to execute this winter as we were very constrained on personnel and equipment.

[Locke]

Originally Posted by Bunk

WTI at $66 and rising, seems fairly significant. Is this price escalation going to sustain? Admittedly, my knowledge of oil markets is somewhere between nothing and very little.

Is it almost time for Double-Meat?

Or...*gasp* perhaps even the fabled 'Steak and Cheese?'

[Firebot]

Originally Posted by Monahammer

NEP round 2 incoming imo lol. Wonder what people here will say when Trudeau does start building his own pipeline... with a crown corporation.

Isn't that literally what Transmountain is?

https://globalnews.ca/news/7207211/t...tawa-purchase/

The report, based on numbers from Canada Development Investment Corp. — which owns the pipeline on the government’s behalf — notes operating expenses of $366 million, financing costs of $223 million and a $172-million depletion and depreciation expense on the pipeline assets.

LOL indeed


Back to the Line 5 debacle, a reminder on the Trudeau government's stance on Energy East.

https://www.ctvnews.ca/politics/no-s...deau-1.4219086

“There is no project on the table,” Trudeau said of Energy East in an interview with CTV Question Period host Evan Solomon that airs Sunday. “There is clarity that under the current approach, there is no support for a pipeline through Quebec.”

Trudeau would not allow a pipeline to be built through Quebec because of no support, but wants to fight to allow a pipeline to go through a foreign country's water resources for the benefit of Quebec.

[burn_this_city]

Originally Posted by Locke

Is it almost time for Double-Meat?

Or...*gasp* perhaps even the fabled 'Steak and Cheese?'

Steak and Cheese is reserved for the $80 WTI levels.

[Firebot]

Originally Posted by Lubicon

Trudeau wins by:
Protecting Canada's interests (west and central)
Environmentally is not building a new pipeline, it's keeping status quo so he doesn't have to worry about flack from his left

Biden winds by:
Also not adding to the fossil fuel thing, he's keeping the status quo. He's also protected from his left.
A win in foreign relations

Michigan Governor wins by:
Looking like she is trying to shut the line down
Gains by playing the 'I tried' card, overruled by the big bad Feds.
Doesn't harm her own State's economy which a shutdown would do.

Everyone gets something they can benefit from without having to give up much.

Biden and Whitmer have a strong relationship and see many things alike.

Biden has zero reason to block the governor's decision here in a swing state that had a Republican prior to her. She practically ran on shutting down Line 5. This would be seen as a slap in the face and politically I see no reason why Biden would try to usurp the governor's decision.

[Locke]

Originally Posted by burn_this_city

Steak and Cheese is reserved for the $80 WTI levels.

One day my friend.....one day!

We can dream!

[Fuzz]

Originally Posted by Locke

One day my friend.....one day!

We can dream!

Yup, we are still at ground beef and cheese wiz.

[nik-]

$8 more a barrel and it's at least double cheese time.

[Locke]

Originally Posted by nik-

$8 more a barrel and it's at least double cheese time.

Wait....are we talkin' real cheese or that insanely delicious processed stuff?

[nik-]

It wouldn't come in triangle slices if it wasn't real cheese.

[Locke]

Originally Posted by nik-

It wouldn't come in triangle slices if it wasn't real cheese.

I mean...I cant disagree that triangular cheese is the best cheese.

That square crap is for chumps and the weak.

[DiracSpike]

Originally Posted by Monahammer

NEP round 2 incoming imo lol. Wonder what people here will say when Trudeau does start building his own pipeline... with a crown corporation.

I'd say what I've said repeatedly about him and Transmountain; thank you for doing what's right for the country.

The "pipelines going east to ensure that as a country that produces more than we consume we are completely self sufficient" was the good part of the NEP that everyone could get behind. It was the "we're going to #### you on the price and you're going to like it" part that made the program terrible.

[CaptainCrunch]

Gas in the lower mainland could jump from 1.42 a litre to 1.53 by sunday. All of our friends out there should be filling up their cars before that happens.

[Bunk]

Thanks everybody. I’ve heard a few politicians and pundits suggest that even with higher prices, this could be a “jobless recovery” in the patch - with so much emphasis on keeping costs down, companies will realize good profits, but not necessarily ramp up any spending or hiring. What does the brain trust think of this assertion?

[DownhillGoat]

I'd say that's fairly likely. Might see a bit more employment come back to the service/support side perhaps as maintenance will still be required and perhaps increased.

I think pretty much everywhere will be trying to run lean and recoup losses from the last few years. Hell companies that are seeing record or above projected profits are still cutting costs/benefits/downsizing.

[Ashartus]

On the service side I'm still hearing a lot of "even though oil is back over $60, we still need you to keep the rate reductions we forced on you when oil was $0."

[nik-]

Originally Posted by Ashartus

On the service side I'm still hearing a lot of "even though oil is back over $60, we still need you to keep the rate reductions we forced on you when oil was $0."

If services demand outpace supply the prices will shoot up again like they always have. This is a pretty short term change in oil pricing, it's not exactly time to just set things back to the way they were yet.