There was a story on CBC radio this morning about Alberta oil producers running out of places to store their petro-production. No mention in the report that it's a problem that's happening world wide.
There's a severe oil tanker shortage. Producers and investors are now using them as floating tank farms to store oil until "better times" return. These supertankers aren't delivering oil. To where?
There is an oil production/price war underway pitting Saudi Arabia against Russia. When Russia refused to slash output the Saudis retaliated by ramping up production to insane levels given the collapsing markets.
Now the Saudis have announced yet another increase in crude oil exports to start in May. Another 600 thousand barrels a day.
The Saudis, who launched an all-out price war for market share with Russia after Moscow refused to back deeper cuts, will not only boost April exports from the current 7 million bpd, but it will also grow exports in May by another 250,000 bpd from April. Now supply is expected at 10.6 million bpd starting in May, as per the latest Saudi statement.
According to analysts, no deal can save the market right now as demand destruction could reach 20 million bpd or more in the coming weeks.
7 comments:
I was reading the other day that Alberta's tar is now worthless. The price that dilbit now fetches is less than the cost of the naphtha diluent needed to get the bitumen to flow.
This is a perfect opportunity to allow oil and gas companies to go bankrupt. We know they're not going to pay cleanup costs anyway, so let them die. The workers should be fully supported by government programs until they can be put to work on cleanups or retrained. Rip the Band-Aid off and let the inevitable happen.
Cap
Yes, I heard the same report, and commented on it on Climenhaga's blog. That special substance, Western Canada Select, is under $4 US a barrel. Yet kenney is still digging. Manufacturers of all sorts, and especially car companies, are closing for extended periods. But all the Alberta mind can do is whine about lack of storage capacity. The shit isn't worth the storage farms it's filling now. If the solution for the foreseeable future isn't obvious, then these people should be fired for gross incompetence.
There is zero reason to continue with the TMX, and as you've pointed out so many times, BC LNG is also uselessly expensive, so why they keep on with that CGL is beyond me. Logic doesn't penetrate the brains of complete dullards. What with SchMoe, kenney and Horgan, Western Canada is governed by fools in my opinion, and in kenney's case a raging sociopath as well. The man can only set people at each other - that is his divisive modus operandi also shared by such advanced intellectuals as Preston and Stevie, prime nasty dolts one and all.
BM
Ever gone swimming off a dock in Lake Superior? No matter how warm the weather, you know what awaits on that first headlong dive. So you wait and contemplate what you're in for. Maybe you think better of the whole idea and turn around. Of you might pause while you muster the courage to go for it.
We live in an era in which our political caste is less likely than ever to answer duty's call without prior regard to their partisan political interests. It may sound cynical but, in my opinion, the notion of riding to the guns has lost all currency.
We have had a generation of leadership that prefers low-hanging fruit to real challenge. That breeds neither vision nor courage, the absence of which leaves us all and our nation betrayed.
The media presents the oil price war as being between Putin and Bone Sawman. It's not really. The two of them are ganging up to drive high-cost producers out of the market - the targets are US frackers and Canadian and Venezuelan heavy oil producers. This is actually doing the world a favour by eliminating the dirtiest forms of oil first.
Our leaders would be foolish to miss this unique opportunity to exit the ranks of petro-states. Unfortunately, not only are they gutless as you point out Mound, they've also tied themselves to the sinking ship by buying a pipeline nobody needs. It would take real stones to level with Canadians and admit you got conned out of $5b, but you've decided to cut your losses and no longer provide a penny of subsidy to the oil barons. None of our "leaders" have what it takes.
Cap
It's off topic. Lake Superior has always scared the shit out of me. I think it's because the beast always seems to be so unrelaxed as if waiting to do something to anything that approaches it.
The operative word there, Cap, is "none." There is no one willing to right the keel on our failing petro-state economy. None will take the political risk of doing the right and necessary thing.
John, on unbearably hot days, you can use waters like Superior's to acquire just enough hypothermia to keep you cool for hours. If you can stay in long enough to chill the body core even a hot, muggy Ottawa day can be vanquished. I'm sure it's medically unsound in many ways but experience has taught me that it does work - if you recognize when you've had enough. If.
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