Crude Observations

On a break!

Alright folks here we are. It’s mid-August and the blog is late. Why you may ask? Well, simple really. I was on vacation. Taking a break. Spending a few precious moments with family not thinking about what mask I’m supposed to wear, what the restaurant protocol is, do I have to run the lettuce through a liquid hydroxychloriquine rinse before I eat it, can I send my kids to school without all the attendant insanity of potential infection, contact tracing, lockdowns, online learning and quarantines. Never mind obsessing about when can I open the office and what does reopening mean to both my lunch routine and my carefully crafted shorts and dress shirt Zoom outfits?

It’s all a bit much. Which is why we left the city, went to the mountains, spent a few days on a lake, drove a boat really fast, tried to launch the kids off a tube and ate an absolutely offensive amount of fried food.

It was as they call it a “mental health week” and it may not have been enough. We were on a break and I mentally committed to a non blog week. Which is weird for me, but necessary.

In the meantime, it seems I have missed an eventful week.

  • CNRL has agreed to purchase Painted Pony, building its dominant Canadian energy play ever further.
  • Donald Trump is trying to defund the post office, I can only guess he misread the memo that said police.
  • That WE scandal isn’t going anywhere positive for Trudeau. What in the world were they thinking?
  • Alberta had some outbreaks at a meat packing plant and an oil sands facility. Toronto had 500 potential exposures at a strip club. Priorities people, isn’t the focus on schools and essential services?
  • Sports is back, NBA and NHL are awesome. Toronto is out as is Edmonton. Calgary wins the first playoff series at the shiny new Edmonton barn and the Vegas Knights are the pizza buying heroes of the bubble.
  • Joe Biden has emerged from hiding and announced Kamala Harris as his running mate, something I predicted in my fearless forecast. It was expected, but it is seismic. The dynamic has shifted in the campaign. It has been a l0ng time since it felt that Donald Trump was yesterday’s news, but here we are.

I will spend some time on the Biden energy position in a later blog, as that is important. But the next 80 some-odd days are going to determine what the rest of my working life is going to look like, so it will take more analysis than me sitting on a patio sipping vodka infused tea on ice (so good, email me for details) to give you something really substantive to think about, so I won’t rush it.

Energy markets are recovering, I spent a day of my vacation arguing with Ed the Sock. It’s been an interesting week.

I wish I could tell you more, but…

We were on a break!

Prices as at August 14, 2020

  • Oil
    • Oil storage was… down!
    • Production was … FLAT?
    • OPEC+++++ is increasing production – slowly
  • Natural Gas
    • Storage was up, historically very high; consumption flat; production flat; exports flat.
  • WTI Crude: $42.20 ($41.52)
  • Western Canada Select: $29.95 ($29.72)
  • AECO Spot: $2.28 ($1.943)
  • NYMEX Gas: $2.441 ($2.320)
  • US/Canadian Dollar: $0.7544 ($0.7526)



  • As at August 7, 2020, US crude oil supplies were at 514.1 million barrels, a decrease of 4,5 million barrels from the previous week and 73.6 million barrels higher than last year.
    • Production was down for the week at 10.700 million barrels per day, which of course we know is impossible. Production last year at the same time was 12.300 million barrels per day.
    • Imports rose to 5.621 million barrels from 6.010 million barrels per day compared to 7.714 million barrels per day last year.
    • Crude exports from the US rose to 3.143 million barrels per day from 2.819 million barrels per day last week compared to 2.683 million barrels per day a year ago
    • Canadian exports to the US fell to 3.483 million barrels a day from 3.785 million barrels per day last week
    • Refinery inputs increased during the current week to 14.658 million barrels per day
  • As at August 7, 2020, US natural gas in storage was 3,332 billion cubic feet (Bcf), which is 15% above the 5-year average and about 22% higher than last year’s level, following an implied net injection of 58 Bcf during the report week
    • Overall U.S. natural gas consumption rose 0.5% during the report week.
    • Production was up 1,2% for the week. Imports from Canada rose 2.6% from the week before. Exports to Mexico fell 1.7%
    • LNG exports totaled 29 Bcf
  • As of August 14, 2020, the Canadian rig count increased 7 to 54 (AB – 33; BC – 11; SK – 8; MB – 0; Other – 2). Rig count for the same period last year was 137.
  • US Onshore Oil rig count at August 14, 2020 is at 172, down 4 from the week prior.
    • Rig count a year ago was 770
  • Natural gas rigs drilling in the United States is up 1 at 70
    • Rig count a year ago was 171
  • Offshore rig count was up 1 at 13.
    • Rig count a year ago was 22

Trump Watch: Defund the Post Office – it’s the only way I win!.

Kenney Watch (new!): Touring the province – campaign style!

Trudeau Watch (for balance): This seems like a really good time for a vacation…

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