Oil Prices Now

ABMax24

Feeling the Heat
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.
 

begreen

Mooderator
Staff member
Nov 18, 2005
82,668
South Puget Sound, WA
Consumption decline is not temporary. Travel will not be the same for a while.
 

ABMax24

Feeling the Heat
Consumption decline is not temporary. Travel will not be the same for a while.
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.
 

begreen

Mooderator
Staff member
Nov 18, 2005
82,668
South Puget Sound, WA
Ah, that is price decline. It went positive today to a whopping $0.54.
Given the current position of US producers they will not come out of this ahead and will lose market share. I fully expect to see the US return to a net oil importer within a year.
Yes, I think we are in for a bumpy ride.
 

ABMax24

Feeling the Heat
I'm guessing 2$ a litre for regular gas by December. I hope I'm wrong.
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.
 

ABMax24

Feeling the Heat
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...
 

mcdougy

Feeling the Heat
Apr 15, 2014
424
ontario
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?
 

johneh

Minister of Fire
Dec 19, 2009
2,785
Eastern Ontario
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
 
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ABMax24

Feeling the Heat
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?
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.
 
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ABMax24

Feeling the Heat
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
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.

 
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mcdougy

Feeling the Heat
Apr 15, 2014
424
ontario
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.
 

ABMax24

Feeling the Heat
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.
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.
 

Sodbuster

Minister of Fire
Sep 22, 2012
1,454
Michigan
There is a distinct possibility of this with world economies on the brink. I hope you can translate your construction experience into other gainful employment.
So Begreen, what's your long term way in which to weather this storm?