| « The sheer optics of the dreadful oil spill in the Gulf Coast | Responding media inquiries about the tragic oil spill in the Gulf of Mexico » |
From the Gulf of Mexico to Quebec – the calm before the storm…
We won’t dwell on the ongoing, will-it-ever-end mess in the Gulf of Mexico as this has been the media’s lead story for some time now. But it seems that politicians are now going to muddy the waters even more, as many of their future political lives may be hanging in the balance. Our only question is how come at the outset the estimates of the spill volume was 5,000 bpd yet at the beginning of this week this was increased to between15,000 and 28,000 bpd but lo and behold at the time of this report a “government agency” has run the number up to 40,000 bpd. The numbers keep climbing. Not to make light of the matter in any way, but we sure are happy these Masters of the Estimate aren’t weather forecasters.
We’ll comment only briefly on the U.S. inventory situation, as nothing has changed to raise any concerns. In fact, you can see that demand for distillates and jet fuel continue to be encouraging with weekly increases of 12.1% and 5.4% respectively. Inventories of all crude, distillates and gasoline remain above the 5-year average and refinery runs are creeping up to the 90% level, which all in all makes for a good supply demand balance. As a result, we do not see any major price shocks on the horizon until such time as the hurricane season begins in earnest.
On a local level, we see that the Shell refinery in Montreal is now officially history despite the last minute bids by two unnamed parties. The refusal of both offers suggests to me that the bidders were not from off-shore, but more likely existing competitors such as Irving or Husky. Off-shore bidders would have been less of a threat to the Shell downstream operations whereas selling the refinery to Irving would have been handing over all of their Quebec market share to Irving or Husky.
By: Roger McKnight, Senior Petroleum Advisor
What will happen now that the Pilot takeover of Flying J is complete and what will it mean for cardlock in Quebec? Find out in this week’s Energy Report. Sign up for the Report by sending your email to: info@en-pro.com.