Crude Observations

One Shining Moment?

So here we sit, housebound mostly, wondering whatever can we do on a Good Friday to entertain ourselves. If you’re like me, you have probably gotten tired of Twitter and Facebook, or at least the Social Media Certified Epidemiologists who seem to dominate those platforms lately. Plus at this point the oil cuts aren’t finalized so I can’t opine on that, although I will at some point don’t you worry.


You’ve probably also gotten tired of and will never miss all the talking heads, the government press conferences, the criticisms of the government press conferences, the mask/no mask debates, hydroxychloroquine, that weird Trudeau Moistly YouTube video, the upcoming recession/depression/pancession, the price of oil, the lack of toilet paper, the lack of garlic, no packs of chicken drumsticks, the one bag of flour limit, being called “tribute” when you go grocery shopping, working from home, the incredible variety of hoodies that you see when you get on Zoom calls, random 40 minute time limits and pretty much everything that has to do with coronavirus.


But aside from hating all that, you know what I will never miss? All the smart people who are on the air helping us figure out what to do to flatten this curve and the health professionals keeping us as safe as they can. And the frontline grocery and essential product sales and delivery people. And the truckers and warehouses that keep the supply chains working. The dude who delivers my random takeout orders for Skip or UberEats and the restaurants that are supplying that food. The people in the food processing and agricultural community who keep the product coming. The people in the field making sure that our energy infrastructure stays up and running so that the products we need can be shipped, our homes can be heated and places like hospitals can have uninterrupted power and supplies. There are too many of these professions to enumerate, but it goes without saying that the average Canadian has never actually thought about how many people it requires doing so many different things to support our privileged lifestyles.


But that’s not even why I am here. No, I am here because there is something I completely missed and I only thought of it when I realized that last Monday was to have been Championship Monday, the culmination of the NCAA Men’s Basketball Tournament otherwise known as March Madness (also known as “Duke came up short again”). One of my favourite times of year and also the time when I prepare my annual Crude Observations Sweet 16 bracket. And I totally missed it this year. The tournament was cancelled, the world got flipped on its head and I totally forgot.


And for this I am sorry. But, as we all know, March was a bit… unsettled. Not that April is much better, but at least we have had the opportunity to catch a deep breath and settle into a bit of a routine. At least I have.


And given that, I am going to present you with this year’s Sweet Sixteen. Potentially coronavirus edition.


Last year was a pretty intense energy-focused tournament and my final match up was a doozy, featuring Permania against OPEC, with OPEC easily trouncing its American rival due to its depth and ability to keep up with the Permanian run and gun offence.


This of course was a fairly easy prediction since it seems every time any upstart producer comes up against OPEC, they get fairly easily shut down.


Of course, in the interests of fairness, in order to properly assess my predictive chops, it is worthwhile to also take a look at my actual “basketball” picks from last year.


Oh yeah, Final 4 – University of Virginia v Xavier and Villanova v Duke. UVA over Villanova. Done like dinner. Go Cavaliers. Go Charlottesville.


What actually happened? UVA beat Auburn and Texas Tech beat Michigan State. In the Championship game, the Cavaliers of UVA prevailed. How to credit this? I had three of the final four teams all wrong (with only one my other three making it to the Sweet 16 and one not even making the tournament!), but I picked the eventual winner, so that’s gotta count for something. Either I am an excellent front runner or I am limited access fortune-teller.


Your call.


Gambler’s advice? Take my predictions with a grain of salt – please. And only rely on me for broad conclusions, not specific matchups.



As always, this year’s players in the energy bracket are a little different than last year. The early rounds saw some interesting matches and upsets. Much of Canada as we know is officially out or relegated to the junior tournament, but familiar names such as OPEC and Russia remain and Permania – now coached by the disgraced Rick Pitino is still hanging around thinking they are the best thing going. New entrants crashed the tourney from some of the mid-major tournaments and the at-large bids, so they don’t fit the energy basket specifically, but they are a big influence. In this instance, we are dealing with the Coronavirus team, renamed and retooled from Black Swan two years ago with their new coach Bobby Knight and several other upstarts like UberEats and the boringly named Health/Science team.


So without further ado, the major themes face off against each other in an epic battle for global relevance.


Sweet Sixteen


In the first game, perennial favourite, last year champ and preseason number one seed OPEC faced off against a retooling Alternative Energy team which qualified as the Number 16 seed. While as always there was considerable hype before the game – mainly from the media – about Alternate Energy’s  growing buzz and excitement, ultimately they were an undersized team that was no match for the scale, execution and killer instinct of the defending champion. While Alternative Energy no doubt had the more boisterous fans, they were pretty quiet after OPEC’s dominant performance.


In an ironic seeding, the number 2 seed, Permania, found itself matched up against an up and comer, Infrastructure.  Infrastructure plays a patient and conservative game necessitated by being forced into matches against much flashier and hyped teams such as Permania. After a first half of showboating offense and pandering to the crowd by Permania, the Infrastructure team rallied, deploying not one, but four Canadians and the Permania team faded fast when confronted by the patient picket fence offence and relentless defense. With time winding down, a newly recruited Canadian named Keystone channelled his inner Jimmy Chipwood and delivered the game-winning dagger at the buzzer, sending Infrastructure to the Elite Eight in dramatic fashion and Permania to an early, humbling exit.


Government Finances, the number 3 seed, absolutely crushed UberEats, who qualified in the play-in tournament after a late-season surge, supported by a massive injection of booster cash from new users allowed them to bring in a bunch of ringers. The deciding moment of the game (aside from tip-off) was when Government Finances realized they had a virtually endless supply of players and could use that bounty to bludgeon most any team they came up against with sheer volume.


In a match featuring dark-horse independent power, 13th seeded Coronavirus took on a traditional high flyer Equity Markets.  In what was billed as a classic matchup of market power vs pretender, it turned out that Equity, while highly ranked, was a bit out of gas and due for a comedown. By halftime, it wasn’t even close and an exhausted equity markets team actually finished the game with 50% less players on the court than when they started.


Moving to the middle of the bracket, the team rankings get closer and the upset potential that much more probable. In a big surprise, Natural Gas has remained as a highly competitive 11 seed. Matched up against Russia, a team that recruits both in the Natties backyard as well as the oilpatch, it seemed like Natural Gas was out of its league, but spurred on by support from an emerging North American fan base, Nat Gas kept its head throughout the game and held off a furious rally by the increasingly dour Russians at the end of regulation to squeak through. As this is now the third year in a row that a high-seeded Russian team has been eliminated in the first round, no doubt heads will roll. Actual heads.


10th ranked newcomer Health & Science pulled off what for a moment appeared to be the upset of the tournament against a surprisingly high ranked Canadian Politics at #7. Once an important player in the energy community, it appeared that the Canadian Politics team lost interest in the game in the second half, realizing that they had just lucked into the tournament and pretty much handed the game to the Health & Science team. Even gadfly defender Poilievre was seen applauding the H&S team for their effort by the end of the game.


In what was expected to be a marquee matchup, the plucky and downtrodden Energy Services team at #12 saw itself matched number 5 ranked Trump. A doormat for the past few years, Energy Services was buoyed by some of the new technologies it has been using in its training recently and was also helped by a youth movement which has seen it develop a lot of younger and hungrier players eager to make their mark. Unfortunately team Trump was able to use its typical bravado to intimidate the officials, got unprecedented media coverage, broke very rule in the book and, even at the end of the game when it was clear to anyone watching that Energy Services had scored more points, was able to claim victory by getting 51 old white guys to vote against the team’s ejection and move to the next round. Better luck next year Energy Services!


The last matchup of the opening round was YUGE pitting number 8 ranked The Environment against Oil Prices. While oil prices had been ascendant for a while, they ran into a bit of hiccup during the qualifying rounds, losing to Coronavirus, which alloed that team to make the tournament and dropped oil prices from its expected number 4 seed all the way to 9. Already reeling from its loss to Corona, Oil never seemed to be in the game, fading fast as the game wore on. In an second half rally attempt, the Oil team decided to switch all their jersey numbers to single digits but that just seemed to demoralize them further. As oil faded, the Environment game got cleaner and stronger. There was a late game rally, but just as Oil Prices started to give a push they realized their next opponent was going to be OPEC, so they gave up and completely cratered.


Elite Eight


A number of intriguing matchups in this round.


The first was a match featuring Trump, fresh off his scam win against Oilfield Services trying his hand against theoretical underdog and evil 13th seed Coronavirus. Steady, robotic and inexorable, the Coronavirus team was remarkably implacable in the face of the typical onslaught of no-look passes, recycled Harlem Globetrotter head-fakes, buckets of confetti and assorted flim-flammery that the Trump team typically employs. At one point in the second half, Trump attempted to slip some malaria pills into the Corona team’s Gatorade bucket, but it did nothing to slow them down. Even with renewed cheating, there was no way they were going to be tricked in this game and the outcome was never really in doubt. By the end of the game, the Trump team had had so many ejections by referees Joe Biden and  Kamala Harris (the first female referee in the tourney’s history!) that only the orange mascot was left on the floor, trying to claim a moral victory, but the lights in the arena were already out and appropriately social distanced cleaners were disinfecting seats for the next game.


In another highly anticipated matchup, quasi Cinderella-story The Environment went up against the OPEC. While the Environment draws players from around the world and on occasion has great balance, OPEC is a perennial powerhouse team that is able to bend how the world derives energy to its whims and, absent members from Western democracies, when it comes up against teams like the Environment, well, let’s just say it, they play dirty. The first inkling this wasn’t going to be pretty was when OPEC filed a challenge and had Greta, the environment’s laser focused three-point bomber, disqualified before the game for being under 18. Leaderless, the E team had no answer for the ruthless OPEC attack and dirty play under the basket. A flagrant foul elbow to the head of Bill McKibben by MBS was the last play of note in the game, and it came in the first half.


On the other side of the bracket, we got to see a matchup of Government Finances, always a major player, going up tournament surprise Natural Gas.  The Government team was big a few years ago and while they still dominate, they have been known for periods where they lose their discipline and the end comes quickly and spectacularly. Fortunately for them, this Natural Gas team, who they had never faced before, faded away as fast as spring sprung (except in Calgary, where it has snowed every second day since the beginning of March). Unforced errors, over-production, too many men on the court. Undone by their errors against a superior opponent, the Natties took their lumps and a measure of satisfaction in hanging in as well as the big upset of Russia in the first round. With conference mate Permania in rebuild mode, expect the Natties to be back much stronger next year.


Which of course leads us to the last match of the day. A bizarre confrontation between two tournament upstarts – Health & Science and Infrastructure. With a roster comprised of red-blooded Canadians and talented US-based ex-pats, the Infrastructure team was coasting off its tournament-busting upset of Permania, while Health & Science, another team with a strong Canadian pedigree was able to silence Canadian Politics. As an aside, should tis corner of the bracket be called the Poutine Patrol?  This had to have been the most polite game of the tournament – “no, after you” “excuse me” “I’m sorry” “I think I fouled you” “nice uniform”. Since most of the fans fell asleep about a third of the way through the second half, no one who was there really knows who won this distinctly Canadian game. I am guessing it was Health & Science because that’s what the bracket says advanced, but we’re still not sure.


Final Four


In the opening match, top seeded OPEC took on the Coronavirus, and it quickly became apparent that while OPEC was an incredibly deep team with many options and strategies available to it against any opponent, this evil #13 seed Corona team was something completely different, flexible,, unpredictable and able to respond rapidly to any tactical shift on the part of the OPEC, either pressing the issue on defence, a three-point shooting barrage or switching over to four corners. Desperate to gain the upper hand, OPEC tried every trick in the book – flooding the court with players, enlisting players from eliminated teams, cheating, calling in secret weapon Vlad the Impaler Putin – but nothing worked. In a dominating performance that was utterly humiliating to the #1 seed, Corona dispatched OPEC a easily as any team in memory and moved to the final to await its opponent.


That opponent was determined in the second match of the day, pitting Government Finances against Health & Science. Government Finances as the 3 seed came in with a great reputation but had been taxed increasingly at each stage of the tournament and its bench was wearing decidedly thin, with key players having been utilized in each round and injuries to key parts of the team mounting, Health & Science on the other hand seemed to coming into its own and getting stronger with each round of the tournament. What followed was a rather workmanlike game where it actually felt that each team was in a way helping the other out. Ultimately it came down to the last possession, Health & Science up 1, a few seconds left and an exhausted Government Finance team looking to one more drive to win the game… 7, 6, 5, 4, 3, 2, 1, Buzzzz. What happened? They ran out the clock. Wait, is that even allowed? Didn’t even try a shot. Handed the ball to Health & Science with a nod and wink. “You got this” the captain of the Finance team was overheard saying.




Coronavirus vs Health & Science. In an energy tournament bracket. What have we done to get to this stage? Unprecedented. Bracket and energy buster and evil #13 seed against an upstart Health & Science team that wasn’t even invited to the last few tournaments. True to form, the Corona squad utilized its classic bait and switch tactics, unpredictable ball movement, three-point barrages and physical and mental intimidation to move out to a healthy lead in the first half, doubling their points every few minutes. But as the first half drew to a close a remarkable thing started to happen – the offensive juggernaut slowed. Sensing an opening, a strategic decision was made in the second half to switch to a Wichita Shockers swarming style of defense, slapping down Corona wherever it had the ball. AT the same time, reinforced by players from many of the previously eliminated teams, H&S was able to catch its breath and start to win the battles in the trenches while AI helped them call the right tech-enabled plays. It was about three-quarters into the game that Health & Science finally got the upper hand. In the last minutes of the game Corona pulled out all the stops and tried to drag Trump out as a reserve, but he was having none of it. With everyone finally on the same page, Health & Science turned the game into a runaway. Was it ever in doubt?



So there you have it – agree or disagree, it’s hard to argue that the metaphor got taken behind the proverbial woodshed and beaten to death.


But seriously everyone, it is amazing to me the effort being put into combatting the coronavirus by the health and scientific community – nurses and doctors through epidemiologists through virologists through statisticians through AI and other tech enabled data driven tools. If ever there was a time when the collective knowledge of a species can beat this back, it’s now.


Sappy I know, but it is Good Friday after all.


Office Cat Week 4


My furry friend has abandoned me so I wrote him this limerick in the hopes he will come back and assume his rightful perch.


There once was cat with a tie

In my office, he used to come lie

But Instagram ruined him

His fans they all wooed him

Social distanced, I’m left to just cry.


Stay safe. Be kind. Wash hands.


Prices as at April 10, 2020

  • Oil prices
    • Oil storage was up (no kidding!)
    • Production was down marginally
    • Noises about major cuts to production rallied prices
  • Natural Gas
    • Storage below last week, but historically very high; consumption down; production flat; exports flat.
  • WTI Crude: $23.17 ($28.79)
  • Western Canada Select: $5.10 ($12.56)
  • AECO Spot: $1.74 ($1.78)
  • NYMEX Gas: $1.71 ($1.604)
  • US/Canadian Dollar: $0.7166 ($0.7054)



  • As at April 3, 2020, US crude oil supplies were at 484.4 million barrels, an increase of 15.2 million barrels from the previous week and a increase of 27.8 million barrels from last year.
    • The number of days oil supply in storage is 32.2 which is 3.7 above last year at this time.
    • Production was down 600k for the week at 12.400 million barrels per day. Production last year at the same time was 12.200 million barrels per day.
    • Imports decreased to 5.874 million barrels from 6.047 million barrels per day compared to 6.559 million barrels per day last year.
    • Crude exports from the US decreased to 2.822 million barrels per day from 3.155 million barrels per day last week compared to 2.349 million barrels per day a year ago
    • Canadian exports to the US increased to 3.156 million barrels a day from 3.410 million barrels per day last week
    • Refinery inputs decreased during the week to 13.364 million barrels per day
  • As at April 3, 2020, US natural gas in storage was 2,024 billion cubic feet (Bcf), which is 19% above the 5-year average and about 76% higher than last year’s level, following an implied net injection of 38 Bcf during the report week
    • Overall U.S. natural gas consumption fell by 6% during the report week.
    • Production was flat for the week. Imports from Canada fell 2% from the week before. Exports to Mexico were down 10% week over week due to maintenance.
    • LNG exports totaled 42 Bcf
  • As of April 10, 2020, the onshore Canadian rig count decreased 6 to 35 (AB – 22; BC – 11; SK – 1; MB – 0; Other – 1). Rig count for the same period last year was 87.
  • US Onshore Oil rig count at April 3, 2020 is at 504, down 58 from the week prior.
    • Peak rig count was October 10, 2014 at 1,609
  • Natural gas rigs drilling in the United States is down 4 at 96.
    • 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 flat at 18.
    • Offshore peak rig count at January 1, 2015 was 55

US split of Oil vs Gas rigs is 86%/14%, in Canada the split is 66%/34%


Trump Watch: Daily press briefings.

Kenney Watch (new!): Rolled up sleeves and a powerpoint

Trudeau Watch (for balance): Don’t talk moistly

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