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This has been an interesting week to say the least and it’s not even over at the time of writing this report…
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
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