Collapsing demand and brimming storage in the United States, Canada’s almost exclusive oil outlet, have resulted in a very usual situation in the Canadian oil industry. Prices for delivery at Cushing, Oklahoma, are so low that Canada’s producers don’t have incentive anymore to send their oil south of the border.
According to estimates of NE2 Group, cited by Bloomberg, the price of Western Canadian Select for May delivery was US$0.50 higher than the WTI Crude for May delivery at Cushing on Tuesday, the day on which the WTI May contract expired, having plunged to as low as –US$37 a barrel on the previous day for a historic crash of more than 300 percent. While most of the losses in WTI on Monday were attributed to the nature of the paper futures market and traders rushed the exit to avoid owning physical barrels of oil for delivery in May, the crash was indicative of the shrinking storage capacity at Cushing.
Storage in Canada is also an issue and has been such for several years as oil sands production rose while not a single new pipeline has managed to clear all the hurdles necessary to go into operation.
The collapse in oil demand, especially in Canada’s key oil market, the United States, now adds another layer of uncertainty for oil sands producers, on top of the fact that WTI Crude prices—which Western Canadian Select typically tracks—have plunged.
Canadian producers have already started shutting down steam-driven oil sands production projects, Reuters reports, noting the move could have dire long-term consequences for the production facilities. Husky Energy cut its oil sands output by 15,000 bpd. Cenovus reduced its production by 45,000 bpd and said it could raise this further to 100,000 bpd, nothing a cut of this size wouldn’t damage the bitumen reservoirs. ConocoPhillips last week said it would cut its oil sands output by as much as 100,000 bpd.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
Russia's Energy Minister Sees Shortage In Oil Market Next Month – OilPrice.com
Russia’s Energy Minister Alexander Novak is predicting a shortage in the oil market next month, Ifax reported on Thursday.
Novak said that the global oil markets could see a shortfall between three and five million barrels per day in July, depending on the outcome of the OPEC meeting that could be held yet this week.
The meeting that will help shape the future of the oil market over the next few months is proving difficult, however, even though it would appear that Saudi Arabia and Russia have reached an agreement in principle to extend the current level of cuts through the end of July.
The cuts are currently set to ease starting in July.
But negotiations among the cartel members are complex, with Iraq, Angola, Nigeria, and Kazakhstan overproducing—a bone of contention with more fastidious members such as Saudi Arabia.
OPEC+’s compliance reached 89% in May. OPEC’s second largest producer, Iraq, reached only 42% compliance, based off of preliminary data. While Saudi Arabia and Russia agreed to extend the cuts at least for another month, they are not interested in doing so unless Iraq and the other overproducers bring their production in line with the given quotas.
OPEC+ quotas call for total cuts of 9.7 million bpd. Oil demand, however, is still off by 21 million bpd as of May, according to Novak. But that’s up from 25-28 million bpd off in April.
Novak added that the filling up of oil storage has slowed, and that thanks to the current production cuts and the improving demand figures so far, the market should achieve balance in June, before slipping into a deficit in July.
Based on May’s production, OPEC has another 1 million barrels to cut to get into full compliance with the current deal.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.
CPA Canada hit by cyberattack, affecting data of more than 329000 – CP24 Toronto's Breaking News
The Canadian Press
Published Thursday, June 4, 2020 4:15PM EDT
Last Updated Thursday, June 4, 2020 5:41PM EDT
TORONTO – A cyberattack on the Chartered Professional Accountants of Canada website has affected the personal information of more than 329,000 members and stakeholders, the organization said.
The information includes names, addresses, emails and employer names, but passwords and credit card numbers were protected by encryption, CPA Canada said.
It warned the data could be used in email phishing scams and encouraged those affected to “remain vigilant.”
The attack by “unauthorized third parties” occurred between Nov. 30 and May 1, according to an internal investigation carried out with the help of cybersecurity experts.
The organization said it beefed up its security measures and contacted the Canadian Anti-Fraud Centre and privacy authorities after learning of “a possible security incident” the week of April 20.
“Upon discovering this, CPA Canada took immediate steps to secure its systems and conduct a thorough analysis to determine what information may have been involved,” the group said in an email.
“There is no evidence that the encryption keys were affected in this incident and we have no reason to believe the encryption was compromised.”
The personal information relates mainly to the distribution of CPA Magazine and everyone affected has been notified, the organization said.
Hacks against a wide range of companies since 2018 have included medical test laboratory LifeLabs and credit union Desjardins, which combined saw the theft of the personal information of more than 19 million Canadians.
This report by The Canadian Press was first published June 4, 2020.
Canada's trade deficit doubled to $3.3B in April as COVID-19 walloped imports and exports – CBC.ca
Canada’s exports and imports plunged in April on falling oil prices and as the coronavirus pandemic shut down factories and retail stores, Statistics Canada said on Thursday, adding that the reopening of most auto assembly plants may help trade in the coming months.
“We are really getting hammered with respect to cars and crude,” said Peter Hall, chief economist at Export Development Canada.
Total exports fell 29.7 per cent to $32.7 billion in April, the lowest level in more than 10 years, and imports declined 25.1 to $35.9 billion, the lowest since February 2011, Statscan said.
The April trade deficit widened to $3.25 billion from a revised $1.53 billion in March, Statscan said, larger than the $2.36 billion forecast by analysts in a Reuters poll.
Exports of energy products fell $3.6 billion, the largest decrease on record, Statscan said. Crude oil exports led the decline, plunging 55.1 per cent.
Meanwhile, exports of passenger cars and light trucks slumped 84.8, while imports plunged 90 per cent.
The slump in auto and energy exports because of shutdowns was also reflected in Canada-U.S. trade data, where total trade fell by $23.4 billion, representing more than 90 per cent of Canada’s trade activity decline. The neighbouring countries’ automotive and energy sectors are highly integrated.
The coronavirus pandemic has disrupted global supply chains and forced officials in Canada to shutter non-essential businesses and urge people to stay at home. In recent weeks, Canada’s 10 provinces have gradually begun to restart their economies.
“While some factories and retailers began to reopen in May, it’s likely to take until the June data to see any material signs of rebounding economic activity,” said Royce Mendes, a senior economist at CIBC.
“With the focus now shifting to the recovery stage, and with many economies gradually re-opening since May, the worst is hopefully in the rearview mirror,” TD Bank economist Omar Abdelrahman said.
The Canadian dollar extended its decline after the release of the data, falling to 73.88 cents US.
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