Does anyone remember an Easter this early? I don’t. So I looked it up. Turns out it isn’t that long ago. It was only 2008! That year Easter Sunday was March 23rd. That was the earliest in 100 years.
Just out of curiosity, I thought I would check the prices of our favoutie commodities at that date.
On Good Friday 2008 the price of WTI closed at $101.84 and the price of Nymex Gas closed at $9.254 an Mcf. Now that’s what I call a Good Friday, none of this depressed prices and OPEC nonsense.
Except of course six months later, the global financial system colllapsed under the weight of massive defaults and dragged the energy market down with it. The oil patch took 18 months to recover from that disaster while the global financial system is arguably still trying to work its way out of the mess.
Current WTI prices are 60% lower and natural gas prices 80% lower. Ouch.
All in all though, in comparison, the current environment, with prices starting to gradually work their way out the muck and reasonably strong demand growth, doesn’t seem all that bad. Notwithstanding the deleveraging happening in the oil patch (which pales in comparison to the financial sector in 2008), barring a Drumpf presidency, the future seems likely to unfold in a much better manner.
Much better to be looking up at a slow recovery than stading blindfolded at the edge of a cliff.
Maybe not so bad a Friday after all.
Please find below a detailed audio blog I recorded reviewing what the 2016 Federal Budget delivered to the struggling Canadian energy sector.
soundbible.com/2083-Crickets-Chirping-At-Night.html
Prices as at March 25, 2016 (March 18, 2016)
- The price of oil ended the week up
- Storage was up way more than expected
- Production was down
- The rig count fell
- Prices broke $40 but couldn’t hold as the week came to an end.
- More noise about the freeze and a planned meet date supported prices
- Natural gas rose during the week as cold weather couldn’t offset the end of withdrawal season
- WTI Crude: $39.53 ($39.41)
- Nymex Gas: $1.804 ($1.890)
- US/Canadian Dollar: $0.7552 ($ 0.7674)
Highlights
- As at March 18, 2016, US crude oil supplies were at 532.5 million barrels, an increase of 9.3 million barrels from the previous week and 64.8 million barrels ahead of last year
- The number of days oil supply in storage was 33.5, ahead of last year’s 30.4.
- Production was down for the week at 9.038 million barrels per day. Production last year at the same time was 9.383 million barrels per day. The decrease in production this week came from the Lower 48. US prioduction should break below 9 million barrels within a few weeks
- Imports spiked during the week
- As at March 18, 2016, US natural gas in storage was 2,493 billion cubic feet (Bcf), which is 51.4% above the 5-year average and about 68.9% higher than last year’s level, following an implied net injection of 15 Bcf during the report week.
- Overall U.S. natural gas consumption rose by 9.5% for the period led by residential and power consumption
- Oil rig count at March 24 was down to 372 from 387 the week prior.
- Rig count at January 1, 2015 was 1,482
- Natural gas rigs drilling in the United States was up to 92 from 89.
- Rig count at January 1, 2015 was 328
- It was interesting to note that last week, when the rig count rose by 1, Bloomberg cited this as tight oil drillers price responding, but they largely ignote the weekly declines
- As of March 21,with break up in full force, the Canadian rig count was at 55 (8% utilization), 38 Alberta (8%), 14 BC (18%), 3 Saskatchewan (3%), 0 Manitoba (0%)). Utilization for the same period last year was about 25%.
- US split of Oil vs Gas rigs is 80%/20%, in Canada the split is 20%/80%
- Offshore rig count was at 27
- Offshore rig count at January 1, 2015 was 55
Drillbits
- The Canadian Environmental Assessment Agency issued a 90 day extension on its assessment of the Pacific Northwest LNG project to allow it time to assess proponent and other submissions on a delicate fish habitat. The Minister is widely expected to refer the matter to Cabinet for a final decision. Western Canada is on pins and needles.
- Drumpf Watch – With the cadidate group more focused, Drumpf split a pair of primaries this week against his main rival, Ted Cruz. In a sign of how mature the debate is becoming, Drumpf took to Twitter to mock Ted Cruz’s wife. .