It’s hard not to be excited by the story of the day, which of course as anyone in the Canadian energy sector will know is the Trudeau government coming out with an unqualified expression of support for both the Pacific Northwest LNG project and the Woodfibre project.

In announcing this stunning development, Prime Minister Justin Trudeau emphasized the significant economic benefits that would accrue to British Columbia, Alberta and Canada as a whole from this game changing development saying that no longer would a Liberal government allow Canada to play second fiddle when it comes to energy projects.

In addition, when challenged by the media about the increase in carbon emissions from such a massive expansion in natural gas drilling and exploration, Trudeau shot this down with his characteristic flair and global vision stating that “notwithstanding the growth in emissions this would mean for Canada we are of the strong opinion, backed by the science, that the LNG shipped to Asia would displace so much high carbon content coal burning in that continent that the net growth in emissions is expected to be negative and isn’t that what this global village is about – one country with an abundance of clean burning energy giving a hand-up to growing economies that need such sources of fuel?”

As part of his prepared statement, the Prime Minister also laid out his case for a strong and well-regulated Canadian energy industry, saying that Canada has the most stringent regulatory environment for oil and gas development in the world as well as the most robust environmental assessment regime and reporting requirements and that as a nation we were all done being dictated to by special interest groups, trading partners and supra-national non-governmental organizations such as the UN.

While refusing to use the word “ethical” in describing the Canadian energy industry, Trudeau did state unequivocally that it was his thought that a strong Canadian energy sector was a force for responsible energy development and could serve as an example for all the environmental laggards around the world, referencing specifically Saudi Arabia, Iran, Iraq, all the ‘stans, Nigeria and Venezuela.

“Does anyone really think extraction costs in those locales would be as low as they are if they actually were required to be responsible stewards of the environment or remotely care about their people?” He said.

Prior to closing the discussion, in making a final point about the energy sector, Trudeau said jobs and growth and wealth creation were critical elements to a successful Canada and its energy economy and said the Liberal government was committed to doing what was required to securing the highest possible prices for both unrefined and value added fossil fuels.

“A wealthy and powerful Canada is in the world’s best interests and results from a robust energy sector. To deny ourselves the ability to influence responsible development of the world’s resources by holding back the potential of the energy sector is, in simple terms, foolish. This is, after all, 2016.”

The most interesting part of the press conference was how it ended when one reporter had the temerity to ask the Prime Minister whether his newfound embrace of the Canadian energy complex would result in the approval of any of the various oil pipeline projects now at various stages of application and approval, to which the Prime Minister simply smiled and said:

“Just watch me”

Prices as at April 1, 2016 (March 25, 2016) (**projected – I am travelling at close of trading so am winging it)

• 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: $37.00 ($39.53)
• Nymex Gas: $1.950 ($1.804)
• US/Canadian Dollar: $0.7670 ($ 0.7552)

Highlights

• As at March 25, 2016, US crude oil supplies were at 534.8 million barrels, an increase of 2.3 million barrels from the previous week and 63.4 million barrels ahead of last year
  • The number of days oil supply in storage was 33.4, ahead of last year’s 30.4.
  • Production was down for the week at 9.022 million barrels per day. Production last year at the same time was 9.398 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 25, 2016, US natural gas in storage was 2,468 billion cubic feet (Bcf), which is 51.9% above the 5-year average and about 68.3% higher than last year’s level, following an implied net withdrawal of 25 Bcf during the report week.
  • Overall U.S. natural gas consumption fell by 5.1% for the period led by residential and power consumption
• Oil rig count at March 24 was down to 362 from 372 the week prior.
  • Rig count at January 1, 2015 was 1,482
• Natural gas rigs drilling in the United States was down to 88 from 92.
  • Rig count at January 1, 2015 was 328
• Last week the media proudly proclaimed the rig count was at a “record low” to which I say balderdash, a record low is probably zero.
• As of March 28,with break up in full force, the Canadian rig count was at 51 (8% utilization), 35 Alberta (8%), 15 BC (19%), 1 Saskatchewan (1%), 0 Manitoba (0%)). Utilization for the same period last year was about 20%.
• US split of Oil vs Gas rigs is 80%/20%, in Canada the split is 20%/80%
• Offshore rig count was at 26
  • Offshore rig count at January 1, 2015 was 55

Drillbits

• Qatar announced that 12 countries are confirmed for the April 17 production freeze meeting
• Ketchup
• Drumpf Watch – At a monumental press conference today, Donald Drumpf finally revealed that his entire candidacy has in fact been one giant, collossal, April Fool’s Day prank orchestrated by himself and best pal Bill Clinton. A stunned Republican Party suddenly realizes that their only remaining viable candidate is Ted Cruz. Obama hedges his bets, still applies for Canadian visa in order to move closer to his best bro Justin Trudeau.