The En-Pro Blog

For those of you not familiar with the game; it was merely a matter of electronically bouncing a white dot back and forth until you missed. Fascinating stuff at the time. Bouncing back and forth is exactly what has been happening over the last two weeks with attention switching from the truly horrific, frightening and tragic ongoing events in Japan, to the mysterious and annoying military activity in North Africa, to the even more inexplicable political posturing in the US. The purpose of this weekly report is to give you our perspective on the possible short to long-term trends in transportation fuel prices. The earthquake, tsunami and potential nuclear meltdown in Japan has been painful to watch and has caused radical movements in crude oil and diesel prices; the reasons being as follows…

By: Roger McKnight, Senior Petroleum Analyst

To find out about subscription rates for The En-Pro Weekly Energy Report, send your email to: info@en-pro.com.

In typical fashion, the markets are in panic mode, reacting emotionally and WTI crude prices are trading at noon EST around $100.50U.S./barrel, down about $2.00U.S./barrel. Japan is the third largest world economy, and depending on the extent of the devastation, at this time, it is difficult to assess the short term impacts to recovery.

This event will certainly impact energy demands, injecting more uncertainty and volatility into these already jittery markets.

For the last six weeks, the energy markets have been on edge, held hostage by the events unfolding in North Africa and the Middle East. To have fun and test your geographic knowledge of the “revolution zone,” I have included a website for your review. Locating countries in this region is harder than you may think.

It is estimated Libya is presently shipping about 30% (500,000 barrels/day) of their usual crude exports, but for now others are making up the shortfall. There continues to be no supply issues but tensions remain red hot in Algeria, Bahrain, Iran, Kuwait, Yemen, Egypt, Jordon and now Saudi Arabia. These are real threats to future supply if they become reality, so for now NYMEX traders are adding a risk of supply disruption premium of approximately$20U.S./barrel. Saudi Arabia is OPEC’s largest producer, supplying 9.0 million barrels/day and if the announced March 11th and 20th “Day of Rage” protests spiral into major turmoil and revolutionary cries for social change, the sky is the limit on where crude prices will go.

In our opinion, the possibility of a Saudi revolution happening is remote. This is based on the Saudi’s proactive and engaged approach, which we have discussed in previous reports and they will retain civil content and stability.

By: Roger McKnight, Senior Petroleum Analyst

How will the North American markets be affected? And what about the situation in Europe? Check out this week’s Energy Report. For subscription rates email us at info@en-pro.com.

That’s the only way to describe the current crude oil and transportation fuel price movements, which are following the hour by hour changes in the political pulse in Libya in particular and North Africa in general. There is an extreme and present danger that this emotional wave could start hitting the beaches of key OPEC producers such as Saudi Arabia and Kuwait. Then we will have a major problem, but that’s a “what if” situation and it’s the “what if” that is driving prices through the roof.

The leading edge of the pricing hurricane struck last week and prices jumped for no U.S. inventory, supply/demand reason as there is no supply problem and comatose demand.

As it stands now, we are in the eye of the hurricane, which as I understand means a temporary calm before the trailing edge hits us.

What’s furthering complicating the markets? Find out in The Weekly Energy Report. To find out about subscription rates, email us at: info@en-pro.com.

By: Roger McKnight, Senior Petroleum Analyst

Also… check out the En-Pro newsroom – our Roger McKnight has been busy discussing what’s going in the Middle East and how it is impacting oil prices around the world. Roger talks with Seamus O’Regan on CTV’s CanadaAM and on CBC Radio among others. Check out: www.en-pro.com/newsroom to read/listen/hear more.

The energy markets came to a frothing boil with crude reaching $103U.S./barrel during intraday trading. The magnitude of this change is unprecedented. It’s reminiscent of the Hollywood movie “Network” with actor Peter Finch bellowing from his window that famous line, “I’m mad as hell and I’m not going to take this anymore!”

The repressed peoples of these Middle Eastern countries are tired of their selfish dictators/rulers and gross unemployment, rising cost of living, and they all want change NOW.

The freedom revolution has spread. Libyan Muammar “madman” Qaddafi unfortunately his defiance to fight the people to the death could lead to civil war and a potential loss of 1.6 million barrels per day of world supply. It would be so much easier if he and his family left, but what country would take him?

So what does it all mean for North American oil prices? Subscribe to the Weekly Energy Report for more information. Check out the En-Pro newsroom for more on the crises in the Middle East.

By: John Voros, 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