The En-Pro Blog

We just can’t ignore what is happening in North Africa as it is having a profound effect on the price of Brent crude. Just to refresh everyone’s memory, Brent crude is looked on as the European benchmark crude versus the NYMEX based West Texas Intermediate (WTI) is North America’s benchmark.

Normally WTI is priced out at about $1.70/bbl higher than Brent supposedly because of the higher quality based on lower viscosity and lower sulphur levels. As it stands today Brent is now trading at a premium to WTI of $16/bbl, not a discount of $1.70/bbl to WTI.

So what is the real cost of crude?

By: Roger McKnight, Senior Petroleum Analyst

For more information on subscription rates for the full version of the En-Pro Weekly Energy Report, please send us your email to: info@en-pro.com.

Also this week, Roger McKnight talks with Seamus O’Regan of CTV’s Canada AM on how the Middle East crisis has driven up the price of oil in North America. http://www.en-pro.com/news.php?id=212&lang=en

The short and long term pricing forecasts have been changing hourly depending on what TV station you are watching. So let’s grab a remote and see what we can see.

Channel 1: Probably the most boring of options, but you have to start somewhere. This of course is the story on US inventories which should have caused a death defying drop in crude, gasoline and distillate prices especially when refinery runs increased by a whopping 2.7%. Nope…… just forget the stats as prices actually rose. Forget the fundamentals of supply and demand as well.

Channel 2: Imperial Oil profits for Q4, 2011 up 50% and Suncor’s profits tripled. We believe we predicted this would happen in earlier Energy Reports. The main reason that profits increased so dramatically was, as we predicted, because of vastly improved refining margins which have continued to increase with no apparent consumer resistance in the form of lower demand. If you refer to the crack spread graph you will see what we mean as these margins have increased significantly since August of 2010.

And Channel Three? Find out in this week’s Energy Report. Subscribe to the Weekly Energy Report. Send your email to: info@en-pro.com.

By: Roger McKnight, Senior Petroleum Analyst

For more information on subscription rates for the full version of the En-Pro Weekly Energy Report, please send us your email to: info@en-pro.com.

In 2009, the Russian Ukraine natural gas dispute fretted the markets, and last year the Dubai debt crisis accelerated the rise in crude. And a few weeks ago, crude prices were sliding based on negative market sentiment. There were three events that contributed to the recent rally in oil this week; the Alaska pipeline leak, Japan’s Euro support and the White House Oil Spill Report.

The Trans Alaska pipeline suddenly sprung a leak near Prudhoe Bay virtually closing the flow of 630,000 barrels/day of crude or 12% of the U.S. domestic production. It was only last May that another problem closed the pipeline, putting into question the reliability of the 33 year transportation system.

We expect his won’t be the last time our aging North American pipeline infrastructure fails contributing to price spikes.

And what about the kneejerk reaction of the “specu-investors?” How is west coast supply threatened and what’s now driving up crude?

By: Roger McKnight, Senior Petroleum Analyst

For more information on subscription rates for the full version of the En-Pro Weekly Energy Report, please send us your email to: info@en-pro.com.