Crude Observations

Happy Day?

So here we are, June 14th which should be a happy day for a number of reasons yet we are all wondering just what the heck is going on. I went away last week and the world seemed relatively stable, then it all went to hell in a handbasket. I mean seriously, if you weren’t somehow exposed to volatility and uncertainty in your day to day life this past week, then I suspect you weren’t paying attention. If it wasn’t someone pretending to be Iran attacking some oil tankers it was the Toronto Raptors upsetting the natural order of things and winning the NBA title. Meanwhile, storage grew by a measly 4 million barrels and the price of oil collapsed by 4%. Then the tanker attack happened and the oil market shrugged it off. What the heck is going on right? Meanwhile in Canada, the federal government continues its tone deaf approach to industry and we fret and worry.


Look, there is a lot of bad news floating around for the oilpatch amid uncertainty about Bill C69 and Bill C48 as well as less than stellar current pricing. And we are still waiting, and waiting, and waiting for some form of decision to be made about the TransMountain Pipeline expansion. Will it, won’t it, what’s next either way? And now suddenly we have a national unity crisis unfolding as a whole bunch of premiers have banded together to tell the federal government that they aren’t happy with what it is doing with respect to the economy and the regulatory regime. Or, is it a national unity crisis because a bunch of ingrate “conservative” premiers are throwing a hissy fit because they just can’t comprehend the magnificent, climate empathetic, environmentally virtuous tweaks that are being made to how projects in Canada get approved. Either way it’s an unfolding crisis that the players involved have no idea how to calm. Is this really how the Trudeau government wants to head into a pre-election summer?


Like I said, lots of angst. Lots of hostility. Lots of uncertainty and volatility. So what do I like to do when confronted with this type of environment?


Well as most of you know by now, I go straight to full-on rant mode, but I am currently all out of rants. I am actually tired of the battle. I am now 100% convinced that there is absolutely no way that this Liberal government will ever be the pragmatic centrists that we were used to under the likes of Jean Chretien and Paul Martin. Rather we are subjected to empty virtue signalling via impossible to implement policies like the single use plastics ban and outright hostility to the largest sector of the economy. It is completely irrational to expect them to do anything differently on the energy file as clearly the ability to listen to what Canadians from coast to coast to coast are saying isn’t part of the government’s modus operandi. Arg. See what they’ve done to me? I promised to be positive and they are crushing that good vibe right out of me.


But what’s a scribe to do if there is no rant?


Well usually I go grab a bottle of wine and pour it into a paper bottle box type of thing.


But today, and today only, I’ve finally got another option so instead I’m going to grab a big ole bucket of KFC.




Well you see folks, I’ve been invited to a birthday party. And it’s not just any birthday party. Did the bucket give it away? I guess it did. That’s right. I am going to none other than Donald J Trump’s 73rd birthday party.


How lucky am I? I hear it’s going to be a doozy. Some of the best people are going to be there. Only the best people. Oh, and me. The best.


And as luck would have it, I have a guest list and on the guest list, all attendees must register what gift they are bringing the Donald and write a small note explaining the gift because quite frankly some of them are weird. I was told it’s for transparency, national security reasons and to make sure all the gifts are accounted for although I suspect it’s really to weed out the cheapskates can be outed and disinvited.


Me, I’m bringing the bucket. All white meat, 12 pieces. Original recipe. OK, 8 pieces, I got hungry. But I figure I’ll be OK – I don’t think the Don can eat that many pieces.


But the fun part is to see what other people are bringing on behalf of themselves, their countries or their organizations.


Justin Trudeau – On behalf of the people of Canada, I am proud to present two gifts this year, the second being a late addition. The first gift will be to be the first country to actually sign and approve a new trade deal with the Trump administration, even though the USMCA has at this point very little chance of being passed in Congress. The second gift relates to the Toronto Raptors and their significant triumph in the NBA, achieved only yesterday and it is a promise to return the Larry O’Brien trophy to the United States… just as soon as significant progress is made on Keystone XL and Line 3.


Vladimir Putin – As representative of Mother Russia and in full celebration of the great friendship between ourselves, I am pleased to present to the Mr. Trump victory in the 2020 election. Trust me. We have hacked the voting machines. You will win California this time. Oh, and here is that tape that you wanted back.


Saudi Arabian Crown Prince Mohammed Bin Salman – Saudi Arabia is the greatest friend to the President and we are pleased to present to you the rights to build Trump Mecca, a spectacular hotel/office complex not more than 100 meters from the Hajj as well as contracts to purchase ever increasing amounts of American military equipment, much like Iran did before the Iranian Revolution.


President of Iran – the greatest gift of all came from a guest who wasn’t invited and who probably doesn’t really care about the birthday and that was a ginned-up pretext to engage in ever more hostilities towards Iran and distract from the ongoing impeachment discussion.


Chinese President Xi – The People’s Republic of China is pleased to offer Mr. Trump an agreement to drop tariffs and continued low cost production of goods for export to the United States as well as the continued theft of intellectual property, because this will be the inevitable outcome of the trade war.


Mexican President Lopez-Obrador – Unlike Canada, Mexico will not be first to approve the USMCA, but in appreciation for Mr. Trump dropping his absurd tariffs for migrants policy, Mexico is pleased to present a solid gold avocado placed inside a scale model cage.


Japanese President Shinzo Abe – After much deep thought, and since he repeatedly brings it up when he vists, we thought that the best gift for Mr. Trump will be this Sony Betamax player and a copy of the movie Tora, Tora, Tora which shows in great detail the attacks on Pearl Harbor that we suspect Mr. Trump knows very little about.


Charles, the Prince of Whales – My dear Donald, in light of your recent visit and our most delightful conversation on global warming and carbon emissions, I present to you an autographed copy of the most recent IPCC report. Oh, and spellcheck for Twitter.


The Vatican – On behalf of the Pope and the entire Catholic faith, we present to you our prayers, in which we promise to appeal to the big guy himself not to be too harsh in his eventual judgement since you are after all, just flesh and bone. And sin. A lot of sin.


Theresa May – Thanks for nothing Donald. You undermined my efforts to manage this Brexit mess for years and got me canned from my dream job. You get nothing from me. I don’t even know why I was invited.


Joe Biden – Don, I truly appreciate the invite. I’m truly unsure what to get the man who has everything so let’s start with an awkward man-hug that’ll last just a few seconds too long. After that I may need to take a nap, since I’m sleepy after all. Then I’ll wake up in time for November 2020 and I’m pretty sure I’ll give you an old-fashioned whuppin. Enjoy!


Boris Johnson – Happy birthday Donald – I can call you Donald right? I have put a lot of thought into this and have decided that I will give you a very messy, ongoing chaotic Brexit process, which I’m sure you will appreciate since it upends the whole world order which seems to be your end goal. Also, if I ascend to the leadership of the Conservatives in England and thus become Prime Minister, I promise to bestow on you a knighthood, so that you can forevermore be known as Sir Donald, the Earl of Trump.


Jason Kenney – this present is conditional, but if Justin Trudeau is reelected in October, we would be happy to make Alberta your 51st state. We have lots of oil by the way. In case you weren’t aware. So much oil you could stop tweeting at OPEC to “pump more”


Doug Ford – Hey neighbour, thanks for having me. I see someone has already brought you a bucket of chicken so I can’t give you that (it would have been re-gifted anyway), but what I did bring is this box of nifty labels with your name on them. They are sticky backed so you can put them anywhere, like on your desk or the doors to the bathroom stalls in the West Wing.


Barack Obama – Well Donald, it’s hard to argue that I have already bestowed on you the greatest gift possible – a roaring economy on the day you assumed the Presidency, and I see how you are doing your best to squander it with ill-advised trade wars and out of control deficit spending, but who am I to judge? I only did it for eight years. At any rate, please accept this sealed envelope which may or may not contain my actual birth certificate or a certified copy of your university transcript.


OPEC – We present to Mr. Trump a single barrel of oil as a symbol of our spineless acquiescence to his demand to pump more oil into the market after his head fake on Iran sanctions.


Hillary Clinton – While I don’t really know why I am here, I may as well play along. So here’s a thumb drive with all my missing emails. Happy reading. You will note that almost half of them are calendar meeting requests and the rest are from Nigerian citizens offering to pay me millions of dollars if I help them move money out of the country. Perhaps you might be able to help them out with all of your various banking relationships.


Bernie Sanders – Donald, Donald, Donald. What can I give you that you don’t already have? How about this – an autographed copy of my book and free health care for life, paid for by the American taxpayer.


Elizabeth Warren – I was frankly astonished to receive an invitation to this party, but my family raised me to be polite so here I am. And for a gift, I present to you the 1995 Disney animated documentary Pocahontas, so that you can brush up on Native American history. And a bag of popcorn.


Donald Trump Jr. – Dad, can you believe that I didn’t get an invitation to this party? Again? What is that, 10 years in a row? If I didn’t know better, I’d think maybe something was going on. Anyway, I know just having me is a gift, but here’s the best part – I promise to continue to be your fall guy as long as you want.


Angela Merkel – Dearest Donald, we know that you are very proud of your family’s German heritage so we decided to get you a membership at so that you could track things further back than your grandfather Mr. Drumpf. Oh, and we tested your DNA. Did you know that like Elizabeth Warren you are apparently one 80th Native American?


Kim Jong Un – As the supreme representative of the people of North Korea I have thought long and hard on this. What gift can I bestow on the person who has given me the greatest gift possible – legitimacy! Any gift will pale in comparison to the benefits I am getting from our failed diplomatic approaches. But I do know this. We have wonderful missiles here in North Korea, so I am going to name one in your honour and let you choose where you want it sent. But make the target big – the guidance systems were built by Huawei so we can’t guarantee precision on landing.


US Supreme Court – In a split decision along partisan lines, the Supreme Court is pleased to give you free rein. Do with it what you will.


So there you have it. Quite the collection of gifts for good old Donald Trump isn’t it. And surprisingly creative given how many government types there were!


I’m going to close off the blog this week with a bold prediction.


On June 18th, the Federal Cabinet is supposed to be voting on whether to approve the TransMountain Expansion. I am going to guess that this vote is going to be a positive one.


Why do I say that?


Top 5 reasons:


  1. We have a visit to Calgary by Finance Minister Bill Morneau to present to an industry group. The last time he came to Calgary was when the Feds bought TransMountain and given all the mess they are in with Bills C48 and 69, the likelihood he would be caught dead in Alberta after a no vote is slim to none.
  2. We have photographic evidence of train loads of large diameter pipe rolling through Calgary earlier this week bound for Kamloops.
  3. If they delay the vote or vote against the pipeline, the level of anger to the Federal Government will reach 11 and will make the reactions to Bill C69 seem like a meek “by your leave”.
  4. There is a Federal election coming in October. The last thing the Liberals want is for the pipeline cudgel to be wielded by Jason Kenney on a daily basis against them.
  5. I am in possession of a secret memo signed by SNC Lavalin and Bombardier authorizing Trudeau to approve the pipeline, which is important because we know he does nothing without consulting his donors.


That’s it!


Happy Father’s Day to all the dads out there including my own!


Prices as at June 14 (June 7), 2019

  • The price of oil started to recover this week before storage fears and middle east tensions started to do battle
    • Storage posted an increase week over week higher than last
    • Production was down marginally and remains higher than last year this at this time
    • The rig count in the US was down, slightly, while the rig count in Alberta and Saskatchewan improved
    • Natural gas storage was up. The market didn’t care
  • WTI Crude: $52.48 ($54.07)
  • Western Canada Select: $39.43 ($40.69)
  • AECO Spot : $0.86 ($0.86)
  • NYMEX Gas: $2.39 ($2.33)
  • US/Canadian Dollar: $0.7505 ($0.7531)


  • As at June 7, 2019, US crude oil supplies were at 485.5 million barrels, a increase of 2.2 million barrels from the previous week and 53.0 million barrels above last year.
    • The number of days oil supply in storage is 28.8 compared to 25.2 last year at this time.
    • Production was up for the week at 12.300 million barrels per day. Production last year at the same time was 10.900 million barrels per day.
    • Imports fell to 7.611 million barrels from 7.927 million barrels per day compared to 8.099 million barrels per day last year.
    • Exports from the US fell to 3.122 million barrels per day from 3.298 million barrels per day last week compared to 2.030 million barrels per day a year ago
    • Canadian exports to the US were 3.683 million barrels a day, down from 3.866
    • Refinery inputs rose during the during the week to 17.064 million barrels per day
  • As at June 7, 2019, US natural gas in storage was 2.088 billion cubic feet (Bcf), which is about 10% lower than the 5-year average and about 10% higher than last year’s level, following an implied net injection of 102 Bcf during the report week
    • Overall U.S. natural gas consumption was up 1% during the report week
    • Production for the week was flat week over week. Imports from Canada decreased 1% from the week before. Exports to Mexico were up 3%
    • LNG exports totaled 36.0 Bcf
  • As of June 14, 2019, the Canadian rig count was up 1 at 104 (AB – 56; BC – 9; SK – 37; MB – 2; Other – 3). Rig count for the same period last year was 139.
  • US Onshore Oil rig count at June 14, 2019 is at 788, down 1 from the week prior.
    • Peak rig count was October 10, 2014 at 1,609
  • Natural gas rigs drilling in the United States was down 5 at 181.
    • Peak rig count before the downturn was November 11, 2014 at 356 (note the actual peak gas rig count was 1,606 on August 29, 2008)
  • Offshore rig count was up 1 to 23.
    • Offshore peak rig count at January 1, 2015 was 55

US split of Oil vs Gas rigs is 80%/20%, in Canada the split is 57%/43%

Trump Watch: Accepting of foreign government oppo research. Birthday.

Kenney Watch (new!): More labour bills. Cozying up to Quebec! Constitutional challenge!

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