This is just temporary. Basically a bunch of commodity traders got caught with their pants down on and are now having to pay to get rid of May oil contracts they tried to gamble on.
Oil Prices Now
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I was referring to negative/extremely low oil prices. $20 oil is here for awhile, $-37 sure isn't here to stay.
Many producers will just shut in for awhile. I expect oil prices to swing hard the opposite way as we come out of this though. The world has never experienced an extended period of time when new wells and new production capacity haven't been brought on line like we will see the next year, and in that time many semi marginal wells will be capped during that time, further reducing supply.
Given the current position of US producers they will not come out of this ahead and will loose market share. I fully expect to see the US return to a net oil importer within a year.
Ah, that is price decline. It went positive today to a whopping $0.54.
Yes, I think we are in for a bumpy ride.
I think your wrong. That would require ~$150 oil, or the carbon tax to increase exponentially which they are intent on doing but not by December.
But I'm okay with high oil prices, my income is directly tied to it.
So is my income
The higher the price for fule the
less money I have for other bills
and food and other things needed
to run a family farm
If only we could build a pipeline to ship cheap Alberta oil east to Ontario, what a win win that would be, you'd have a cheap and stable source of domestic petroleum, we'd have another market to sell to. But of course we all know how the Energy East Pipeline went...
Excuse my lack of knowledge...can Alberta oil be refined to petroleum? I seem to think that it needs "higher grade" mixed? Is there truth to that?
If crude oil could be piped from Alberta and the rest of the
Western Provinces across Canada we would be self-sufficient
in fule oil and Gasoline. There are 17 refineries in Canada 6 in western Canada,
4 in Ontario, 2 in Quebec, and 2 in the Atlantic Provinces. In 2018, Canadians
consumed 46 billion liters of gasoline. That's a lot of gas for just over 40 million people
Western Provinces across Canada we would be self-sufficient
in fule oil and Gasoline. There are 17 refineries in Canada 6 in western Canada,
4 in Ontario, 2 in Quebec, and 2 in the Atlantic Provinces. In 2018, Canadians
consumed 46 billion liters of gasoline. That's a lot of gas for just over 40 million people
Yes it can be. We do have conventional oil as well that is the same as all other crude. What you are referring to is the heavy oil from the oil sands, which is the bulk of the oil we produce. This heavy oil is mixed with lighter solvents to make it able to be shipped by pipeline. In my area of the province we produce the solvents, we have a lot of natural gas wells that produce short chain hydrocarbons (condensate), this condensate contains many of the components in gasoline, and sometimes used to be called straight run gasoline. Heavy oil (bitumen) is mixed with this condensate to form Diluted Bitumen, also referred to as Dilbit.
Upon processing our heavy oil (bitumen) does require more specialized equipment to first break the long hydrocarbon chains into the shorter ones used for gasoline and diesel. Currently we have 4 upgraders in the province capable of doing this, they effectively sell synthetic crude oil which can be used at a traditional refinery. These upgraders also make fully refined products for use in Western Canada. Actually most of the diesel sold in the province comes from these upgraders, making most of it synthetic diesel (although it's not labelled as such). So I get to run both synthetic oil and synthetic diesel in my truck.
The one thing I don't understand is in Eastern Canada where jobs are more scarce why they wouldn't want this work. Oil upgraders are some of the most labour intensive facilities that I'm aware of, the billions of dollars invested and man hours required in their construction and maintenance easily rival that of nuclear power plants. They employ almost every trade imaginable on top of a dozen different professions.
That fuel also came from 593,000 barrels per day of oil being imported into Canada, most of it from the US. Quite the scheme the US has going on, in the west we sell crude to the US at often less than half its value because of lack of other domestic or foreign markets, and the east buys oil back from the US at full price.
CER – Market Snapshot: Imports of crude oil continue to decrease in 2018
Market Snapshot: Imports of crude oil continue to decrease in 2018
Sarnia, Ontario isn't too far from me, maybe 120kms. Also known as chemical alley, what "oil" are they processing? My aunt works for Suncor and others over here career as a biologist. She is close to retirement age and was expressing deep concern that everything may get shut down due to pricing. She claimed the company doesn't make a nickel until a barrel sells for 42$. They were having a burn rate of 68$ million a day for her plant. Her retirement (stocks) had taken a 40% loss. A rough spot to be in for everyone for sure.
Sarnia Refinery – Refining and Marketing | Suncor
Located along the St. Clair River in Sarnia-Lambton, the Sarnia refinery has been an important part of local industry for the past 65 years. The refinery is an 85,000 barrel per day operation that produces gasoline, kerosene, jet and diesel fuels, asphalt and petrochemical feedstock.
The Sarnia plant can process some heavy oil, how much I'm not sure though, I'm assuming it uses conventional crude mostly though.
I am curious how they are loosing money though, times of low oil prices are usually best for our refineries as the price of the produced fuel never drops nears as much as the price of oil used to make it. Unless they are still buying oil from an existing contract at significantly above today's prices, then that would explain such a loss.
Suncor is a huge company though, their current market capitalization on the TSX is over $31 billion. I've even got shares in them, most people with mutual funds probably do to.
Jan Pijpelink
Minister of Fire
I do not think so. Suncor is a 100% subsidiary of the US Sunoco, which has stopped their refinery business in the US a few years back.
Canadian Suncor is not owned by US Sunoco. Suncor is it's own independant business.
Jan Pijpelink
Minister of Fire
My mistake. They maintained the Sunoco brand in Canada. Thanks for correcting me.
Here is a Bloomberg article on the current fracking situation:
www.bloomberg.com
Frackers Are in Crisis, Endangering America’s Energy Renaissance
Even before the pandemic, West Texas was reeling and Wall Street was running out of patience with the industry.
www.bloomberg.com
And the shale oil situation
www.barrons.com
Why Shale Oil Production May Take Years to Recover
U.S. shale production may recover in the next couple of months then decline again, pulling U.S. shale oil output down, analysts say.
www.barrons.com
The US shale oil industry is in for a world of hurt. The Keystone XL Pipeline is under construction and will displace another 830,000 bpd of domestic US crude with Canadian Heavy oil.
Or not
Keystone XL pipeline remains blocked in Supreme Court order
The U.S. Supreme Court refused to let construction start on TC Energy Corp.’s Keystone XL oil-sands pipeline, rejecting a bid by President Trump’s administration to jump-start the long-delayed project.
www.latimes.com
Or not
Keystone XL pipeline remains blocked in Supreme Court order
The U.S. Supreme Court refused to let construction start on TC Energy Corp.’s Keystone XL oil-sands pipeline, rejecting a bid by President Trump’s administration to jump-start the long-delayed project.
Not sure what to tell you. Construction is still happening, the right-of-way is being cleared, lay-down yard are being filled with pipe, work camps being built.
TC Energy says Keystone XL construction continuing despite U.S. court ruling - BNN Bloomberg
TC Energy Corp. reported a first-quarter profit of $1.15 billion, up from $1.0 billion a year ago.
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