So, last week it was mentioned here that this week I would share with the group a “fearless prediction” on the election. And I will. But first a little indulgence as I set the stage with a few thoughts on the election itself and how it has unfolded, a prediction and some rationale. Next week I will examine the actual results and provide some thoughts on what it means for the energy industry in Canada (see how I milked that for two separate blogs?).

This election cycle has been a painful one for many Canadians. From its start in the “mid-summer vacation/lake/I don’t care about politics” season through next Monday’s election date, this process has been a gruelling marathon but instead of water stations, there have been periodic stops along the way where the electorate has been pummeled savagely across the face.

The race started out as a three-way race with a clear front-runner and it is going to end that way.

For the most part, I refrain from comment or take sides in politics. I won’t do it on social media, I refuse to have a lawn sign. And I’m not going to do it now. How and for whom I vote is my business and all things being equal, I’m about as interested in someone else’s politics as they are in mine. Perhaps this privavcy comes from family influence, or maybe it’s my (slight) embarassment at having voted PQ in an election many moons ago – if you can’t explain it, best not to talk about it!

That said, like many Canadians, I am probably best described as fiscally conservative and socially liberal, so my vote could really go to any of the three parties depending on what is important to me on that particular day. The problem is, I am unconvinced that ANY OF THEM actually deserve my vote.

This campaign has been ugly and opportunistic, full of poison and pandering. None of the leaders of the three major parties comes off well – they each have had moments that I’m sure in a more civilized past would have gotten them a spanking from their respective mothers.

From the worst, base instinct appeal of the Conservative’s alleged race-baiting (Niqab bans, anti-terrorism bills) to the (almost) equally reprehensible class war pandered to by the Liberals and the NDP (increased taxes, wealth transfers – “we’re gonna take from the 1% and give it to the middle-class!”), the politics of division have been on full display no matter whether it is rich vs poor, non-white vs white, east vs west, environment vs energy, Habs vs Leafs. And confronted with a choice of tossing out decades of pluralism and multi-culturalism or sticking it to the wealthy, I suggest the 1% order a new set of cheques. Probably the most cynical part for me was the Syrian refugee crisis flare that burned with bright opportunism for a news cycle before all but disappearing from the debate. Note to the parties – that issue? It’s still there. Probably worse. Don’t talk. Do.

Discussions of policy have, at best, displayed the depth of a tweet. Flip-flops, uncosted and unfunded promises abound. On the economy, one party promises to run deficits to fund infrastructure but can’t even indicate what infrastructure is they are going to finance. Another promises to implement a costly day care program that requires provincial approval and funds – never gonna happen! The last insists on cynically rolling out targetted initiatives to supposedly homogeneous voting blocs one after another and the result is a mish mash of policy that no one trusts, all while they ask to be re-elected on a track record of economic success that is not actually all that evident.

So where does that leave us? Parsing the tea leaves, reading the mood. Never in my life have I seen a politician who inspires such loyalty on the one hand and vitriol on the other as Stephen Harper. On the NDP front, Thomas “Icarus” Mulcair has had his moment in the sun. A majority of Canadians want change, the polls show that and the Conservatives display all the symptoms of a government that has been in power too long – they seem adrift without substantive differentiated direction and the idea cupboard is bare.

The ball is in the Liberal court right now so the fearless prediction is…

A Liberal Majority. Yup, you read that right.

The rationale is momentum based and a belief that all along this election has really been a referendum on Harper the person and not the Conservative party. There is the positive momentum the Trudeau Liberals have managed to create for themselves, the negative momentum that appears to be taking over the NDP and the comparative lack of any momentum for the Conservatives. I am a believer that in a “change” election, the initial dalliance is always with the outlier but then people start to come back to the safe middle. Clearly this was a Conservative tactic in going for a long election since a traditional length election would have likely yielded an NDP minority – they may have outlasted the NDP, but underestimated the Liberal renaissance.

Much like in Alberta’s provicial election, the final change decision is going to happen in the privacy of the polling booth. I expect the Liberals to win the Maritimes, make inroads in Quebec at the NDP’s expense, take a big bite out of Conservative swing ridings in Ontario, carry B.C. and possibly even pick up seats in the Prairies, including, remarkably, at least one in Calgary!

This prediction is “out there” but go big or go home, right? At the very least a sizable Liberal minority government.

Prime Minister Justin Trudeau – who’d a thunk it? Nice hair though!

Prices as at October 16, 2015 (October 9, 2015)

• The price of oil gave back some groud this week primarily based on demand factors.
  • Storage posted a surprise increase
  • Production shrank marginally
  • Markets reacted positively to some demand fundamentals
  • The rig count decreased again
• Natural gas was flat during the week as anticipation of increased demand in winter played off a warm fall

• WTI Crude: $47.32 ($49.65)
• Nymex Gas: $2.429 ($2.519)
• US/Canadian Dollar: $0.7742 ($ 0.7719)

Highlights

• As at October 9, 2015, US crude oil supplies were at 468.6 million barrels, a increase of 7.6 million barrels from the previous week and 98.0 million barrels ahead of last year. Much of the increase was the result of increased imports.
• The number of days oil supply in storage was 29.8, ahead of last year’s 23.6.
• Production decreased marginally to 9.096 million barrels per day from 9.172 with lower 48 accounting for the decline. Production last year at the same time was 8.883 million barrels per day. Based on the numbers, it is likely that by December year over year production growth in the U.S. will be negative.
• As at October 9, 2015, US natural gas in storage was 3,733 billion cubic feet (Bcf), which is 5% above the 5-year average and about 15% higher than last year’s level, following an implied net injection of 100 Bcf during the report week.
• Overall U.S. natural gas consumption increased by 1.1% this week with a power consumption increase of 7.5% being offset by a residential and commercial decrease of 6.5%
• Oil rig count at October 16 was down to 595 from 605 the week prior.
• Natural gas rigs drilling in the United States are up to 192 from 189.
• As of October 12, the Canadian rig count was off marginally to 170 (22% utilization), 105 Alberta (20%), 31 BC (38%), 34 Saskatchewan (27%), 0 Manitoba (0%)). Utilization for the same week last year was 49%.

Drillbits

• On October 15, 2015 Bravo Oilfield Safety Services merged with Target Safety Services to form Bravo Target LP
  • Bravo Target is a one-stop shop for safety services and safety-related products. It combines the unique competencies of two of Western Canada’s leading safety companies and has extensive experience in numerous areas including safety services for facilities, industrial turnarounds, maintenance as well as oilfield drilling and completions.
  • Bravo Target is 100% Canadian-owned and will benefit from continued strong backing by financial partner Yellow Point Equity Partners of Vancouver.
  • Craig Dore was appointed CEO of the combined entity
  • Stormont Energy Advisors acted as advisor to Mr. Dore and Target Safety Services.
• Everything is for sale! According to Bloomberg, companies have announced US$181.1 billion of oil and gas acquisitions this year, the most in more than a decade, compared with $167.1 billion the same period last year
• Uber came to Calgary
• Schlumberger announced third quarter results, kicking off a grim earnings season with a 34% decline in North American revenue for the 9 month period compared to last year. For Q3 15 (Q3 14)  they report revenue of $8,472 million ($12,646) and pre-tax income of $1,521 ($2,806). Operating margin has declined from 22.2% to 18.0%
  • In the release, management indicates they expect further contractions in activity due to continued pullbacks in capex
• Drumpf Watch – The Donald spent part of the week praising The Putin for his bold actions in Syria, seemingly oblivious to the foreign policy issues associated with Russian belligerence.