The En-Pro Blog

Let’s dispense with the latest U.S. inventory report which, as this recession drags on, is becoming as intriguing as the Olympic gold medal round in ice fishing.

Inventories of all three key commodities are above the five year average with demand negative for all but jet fuel. Refinery runs remain below 80% and this at a time when they will start their annual spring maintenance.

We could actually see runs at below 70% in the next six weeks which, will of course, as usual, jack up prices in April and May. Those tankers that have spent months bobbing off shore loaded with crude and distillates have finally said enough is enough and have started delivery, which somewhat explains the increase in crude inventories and a tripling of imports of distillates.

The recent jump in gasoline prices is a stretch in logic and a good example of how far the speculators will go to justify the situation we find ourselves in; whereby the futures prices of gasoline are higher than heating oil in the dead of winter.

What about imports of gasoline from Europe? And what has the latest shut down of Total, in France done to inventory levels?

By: Roger McKnight, Senior Petroleum Advisor

Find out in this week’s Energy Report. Sign up by sending your email to info@en-pro.com.

In order to navigate out of the recent global recession, most world governments increased spending and deficits, forcing some into unsustainable debt levels.

Last week, the currency, equity and commodity markets were fixated on the European debt crisis. Specifically, the epicenter – Greece, which has been living far beyond their means and there is major concern they will default on their issued bonds and global debt payments.

Greece’s financial books are a nightmare with deficit-to-GDP at four times more than most of the other euro-zone members. The government is dealing with a resistant public not receptive to their austerity measures. Being one of 16 countries using the euro currency, markets expected this would begin a chain reaction financial crisis similar to the Wall St. meltdown of Lehman Brothers in 2008. The other fiscal mischiefs include Portugal, Ireland and Spain. Spain is probably a greater concern because they represent 7% of the Euro-zone economy and Greece is small potatoes at less than 3%. A vague rescue plan was announced last Thursday by the European Union President restoring temporary confidence helping to boost the stock market and oil prices.

So what has this precedent sent to the other fiscal misfits? And how will this all affect North America oil prices? Check out the En-Pro Energy Report. Sign up by sending your email to: info@en-pro.com.

In July of last year, Shell announced they were considering the future of their Montreal refinery at which time we suggested that the word “bleak” would pretty well describe the probable outcome.

Unfortunately, we were correct. For those of you who thought that the recently confirmed decision to close this refinery was the end of the story and that probable pricing and supply problems will be isolated in the eastern part of the country, such is not the case, as another major oil company is in the process of realigning its focus on its downstream operations which is oil-guy-talk for let’s cut some refineries out of the picture.

By: Roger McKnight, Senior Petroleum Advisor

To find out the implications of the Montreal closure means, and what the future of refining in Canada holds, check out this week’s Energy Report. Subscribe by sending an email to: info@en-pro.com. For more on this story go to the En-Pro newsroom. www.en-pro.com/newsroom