Crude Observations

Twas the Night Before

Well here it is, Christmas Eve, the shopping is finally stopping and the family is sitting around being uber-lazy and getting ready for the big day. While I rarely veer off my scheduled Friday blog, it has become somewhat of a tradition to do one last post before Christmas and after subjecting everyone to movie lists, Advent calendars and all that jazz, it’s nice to do a quick best wishes for the holidays missive.


It is worthy of note that unlike last year, where we careened into the new year on a wave of bad news, the past month has in fact been very constructive for oil prices as the worst of the nonsense tariff war is fading and the market is becoming more stable.


Yes we still have all the same pipeline issues in Canada as we had before but we are one year closer to having these long term projects complete so there is a light at the end of the tunnel. Try to not get caught up in all the political rhetoric and partisan griping. Equalization, pension plans, police forces, firewalls, #wexit – none of these are talking points if we have egress and better pricing – don’t let the war room tell you otherwise. So Alberta is actually in a lot better shape than some would have you believe.


At any rate, I am feeling a bit more upbeat for the Canadian energy sector in 2020, particularly on the infrastructure side which, unbeknownst to many Canadians outside the energy sector or people outside the country, has been on a bit of a roll for much of the past year.


So, in the spirit of the season, best wishes, happy holidays and Merry Christmas to all of you. I will see you in 2020 as I take a break this week (well deserved or not!).


Finally, as is now an annual tradition, I present the following poem that I wrote a few years back and modify to suit the current narrative. I like to think of all of you reading this to your kids at bedtime, since that is what I do – even if my kids are too old to believe in Santa Claus, they do still like a good poem, especially if it’s about energy.


A Christmas Ode to the Patch


‘Twas the night before Christmas, when all through the patch
not a rig-hand was stirring, no need to dispatch.
The frac-trucks were parked by the fence-line with care,
in hopes that new capex soon would be there.

The welders were nestled all snug in their beds,
while visions of pipelines danced in their heads.
And Kenney in his ‘kerchief, and Trudeau in his cap,
had just settled down for a TransMountain nap.


When out in the market there arose such a clatter,
I sprang from my seat to see what was the matter.
Away to check prices I went with a flash,
Hoping the market did not again crash.

The price of oil seemed to be rallying hard,
What with OPEC playing the production cut card.
Then what to my wondering eyes should appear,
But a curtailment report showing more cuts are near.


With tight oil plateauing, the signals are mixed,
But I swear to you all, the market is fixed.
More rapid than eagles, the opinions abound,
and the sector, it seems could soon make up some ground.


“Now OPEC! Bin Salman!
Now, Brexit and Wexit!
On, Trudeau! On, Trump!
On, Saudi and Putin!
To the end of the world!
To the end of the glut!
Give it up! Give it up!
The oil patch wants up!”


No more slagging of oilsands, plastics and pipe.
Export markets to open, the timing is ripe.
But up to their pulpits the pundits they flew,
Greta is worried and you should be too!


And so, in a panic, I think this can’t be,
is the world really over for people like me?
As I turned off the news and was turning around,
the thought of the end made me fall to the ground.


Fossil fuels done for – green power they say,
and coal is a goner, by sometime in May.
The wind it blows turbines that spin all around,
and the sun warms up panels, not just worms on the ground.


The world it is changing! Adapt now we must!
The future’s renewable, opportunity robust!
Who cares if my taxes go up, up, forever?
Our leaders know all, since they are so clever.
The fate of our industry held tight in their hands,
While advantage is gifted to faraway lands.
Yet even at that, I hold firmly to hope,
that when all’s said and done, surely we’d cope?


The prices drift round, there’s no rhyme and no reason,
yet with OPEC in play, the rally’s plainly in season.
A simple cut here, some aggressive demand,
Four years of no spending – we’ll be back in command.


For the sector is fickle and it sure is some work,
it gyrates, it shakes and then turns with a jerk.
The bears’ time is done for, the prices will rocket,
and then I’ll have plenty of cash in my pocket .


So doomsters take heed, your view is short-sighted,
The market I know is no longer blighted.
So here I exclaim, ‘ere I drive out of sight,
“Happy Christmas to oil, and to all a good night!”

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