Irving Oil, the operator of the country’s largest refinery, is aiming to begin receiving more crude from Western Canada — delivered to New Brunswick in tanker ships — starting this summer.
The privately held refiner applied last month to the Canadian Transportation Agency (CTA) to use foreign tankers in order to increase the amount of domestic crude it gets from offshore Newfoundland and Western Canada.
Iriving Oil’s application included a proposal for the tankers to transport oil from a terminal in Burnaby, B.C., through the Panama Canal and on to Irving Oil’s refinery in Saint John, N.B.
On Friday, a company official confirmed the applications had received regulatory approval and it is now working through the details of the federal process for approving individual vessels.
“Over the … next few weeks here, we’ll be acquiring crude oil, organizing shipping and then finalizing the approvals for those ships to transport the crude oil,” said Kevin Scott, chief refining and supply officer for Irving Oil.
Scott said they hope to receive their first barrels from Western Canada by ship inlate June or early July.
The company wants to increase the mix of Canadian crude it uses, which is currently in the range of 20 per cent.
“We’d love to see that get much higher and get above the majority — if technically it works and from a logistics perspective all of that works out,” he said.
Increasing the amount of Canadian oil the refinery uses would displace the crude imports the company gets from around the world, but it’s not clear which shipments might be affected.
Scott said the refinery uses a “significant” amount of oil from the United States.
Irving Oil’s refinery in Saint John is the largest in Canada with a capacity to refine 320,000 barrels of oil per day. (CBC)
“Part of this is really opening up the option for us to run more Canadian crude,” Scott said.
“We have limited options today. And, really, when we’re being challenged to be creative in terms of Canadians helping Canadians, this was one way that we said it was possible for us to do that.
“And, of course, all of the approvals and issues around the ships is really what we’re working to get in place … so that we have that option to buy Canadian crude as easily as we buy crudes from anywhere else in the world.”
That could be welcome news for a sector that has been hit hard by a steep plunge in demand for fuel as both consumers and businesses throttle back activity in the face of the COVID-19 pandemic.
Earlier this week, the Canadian Association of Petroleum Producers said, in the short term, the Irving proposal offers a “desperately needed” expansion of the domestic market.
Alberta Energy Minister Sonya Savage said Friday she is glad Irving Oil will begin using more Western Canadian crude, adding that Alberta produces enough to supply the country.
“However, it is unfortunate that Irving is forced to use complicated marine shipping routes either around the entire continent or up from the Gulf of Mexico,” she said in a statement.
“The proposed Energy East Pipeline would have provided a safe and faster route.”
In its application to the CTA, Irving Oil said it recognized recent events had caused the economy, and the energy sector in particular, to be in a state of crises, and that “it is a time for Canada to come together.”
The application stated that it is the company’s intent to enter into long-term agreements with Canadian crude suppliers for the nomination of barrels over a one-year timeframe.
Irving Oil’s plan is to use foreign oil tankers to ship Canadian crude from three key points, including from the West Coast, down through the Panama Canal and on to Saint John.
It also wants to take delivery of Canadian oil from suppliers in Newfoundland and Labrador, as well as terminals on the U.S. Gulf Coast, where crude from Western Canada can be delivered by pipeline.
Irving Oil currently receives some oil from offshore Newfoundland as a routine part of its mix, Scott said, as well as a “small amount” of Western Canadian crude by rail.
“This would increase our capability to get access to Western Canadian crude, either from Vancouver or from the U.S. Gulf Coast, which is a slightly shorter route,” he said.
Asked if the company’s refinery could use Alberta’s heavy grade of oil, Scott said it can use “some amount” and that it has been doing modelling and testing.
“Today we run some synthetic crude oil, which is lighter, from from Western Canada,” he said.
“This will allow us to access the heavier crude by marine [transportation]. But we would expect that it will be a mixture of crudes. Much like our refinery today, we would run a mixture of different types of crudes from different locations, ultimately to get the right mix to make the products that we’re looking for.”
Netflix (NFLX) stock slid as much as 9.6% Friday after the company gave a second quarter revenue forecast that missed estimates and announced it would stop reporting quarterly subscriber metrics closely watched by Wall Street.
On Thursday, Netflix guided to second quarter revenue of $9.49 billion, a miss compared to consensus estimates of $9.51 billion.
The company said it will stop reporting quarterly membership numbers starting next year, along with average revenue per member, or ARM.
“As we’ve evolved our pricing and plans from a single to multiple tiers with different price points depending on the country, each incremental paid membership has a very different business impact,” the company said.
Netflix reported first quarter earnings that beat across the board on Thursday, with another 9 million-plus subscribers added in the quarter.
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Subscriber additions of 9.3 million beat expectations of 4.8 million and followed the 13 million net additions the streamer added in the fourth quarter. The company added 1.7 million paying users in Q1 2023.
Revenue beat Bloomberg consensus estimates of $9.27 billion to hit $9.37 billion in the quarter, an increase of 14.8% compared to the same period last year as the streamer leaned on revenue initiatives like its crackdown on password-sharing and ad-supported tier, in addition to the recent price hikes on certain subscription plans.
Netflix’s stock has been on a tear in recent months, with shares currently trading near the high end of its 52-week range. Wall Street analysts had warned that high expectations heading into the print could serve as an inherent risk to the stock price.
Earnings per share (EPS) beat estimates in the quarter, with the company reporting EPS of $5.28, well above consensus expectations of $4.52 and nearly double the $2.88 EPS figure it reported in the year-ago period. Netflix guided to second quarter EPS of $4.68, ahead of consensus calls for $4.54.
Profitability metrics also came in strong, with operating margins sitting at 28.1% for the first quarter compared to 21% in the same period last year.
The company previously guided to full-year 2024 operating margins of 24% after the metric grew to 21% from 18% in 2023. Netflix expects margins to tick down slightly in Q2 to 26.6%.
Free cash flow came in at $2.14 billion in the quarter, above consensus calls of $1.9 billion.
Meanwhile, ARM ticked up 1% year over year — matching the fourth quarter results. Wall Street analysts expect ARM to pick up later this year as both the ad-tier impact and price hike effects take hold.
On the ads front, ad-tier memberships increased 65% quarter over quarter after rising nearly 70% sequentially in Q3 2023 and Q4 2023. The ads plan now accounts for over 40% of all Netflix sign-ups in the markets it’s offered in.
Netflix reported first quarter earnings after the bell on Thursday. REUTERS/Dado Ruvic/File Photo (REUTERS / Reuters)
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
Oil prices initially spiked on Friday due to unconfirmed reports of an Israeli missile strike on Iran.
Prices briefly reached above $90 per barrel before falling back as Iran denied the attack.
Iranian media reported activating their air defense systems, not an Israeli strike.
Oil prices gave up nearly all of early Friday’s gains after an Iranian official told Reuters that there hadn’t been a missile attack against Iran.
Oil surged by as much as $3 per barrel in Asian trade early on Friday after a U.S. official told ABC News today that Israel launched missile strikes against Iran in the early morning hours today. After briefly spiking to above $90 per barrel early on Friday in Asian trade, Brent fell back to $87.10 per barrel in the morning in Europe.
The news was later confirmed by Iranian media, which said the country’s air defense system took down three drones over the city of Isfahan, according to Al Jazeera. Flights to three cities including Tehran and Isfahan were suspended, Iranian media also reported.
Israel’s retaliation for Iran’s missile strikes last week was seen by most as a guarantee of escalation of the Middle East conflict since Iran had warned Tel Aviv that if it retaliates, so will Tehran in its turn and that retaliation would be on a greater scale than the missile strikes from last week. These developments were naturally seen as strongly bullish for oil prices.
However, hours after unconfirmed reports of an Israeli attack first emerged, Reuters quoted an Iranian official as saying that there was no missile strike carried out against Iran. The explosions that were heard in the large Iranian city of Isfahan were the result of the activation of the air defense systems of Iran, the official told Reuters.
Overall, Iran appears to downplay the event, with most official comments and news reports not mentioning Israel, Reuters notes.
The International Atomic Energy Agency (IAEA) said that “there is no damage to Iran’s nuclear sites,” confirming Iranian reports on the matter.
The Isfahan province is home to Iran’s nuclear site for uranium enrichment.
“Brent briefly soared back above $90 before reversing lower after Iranian media downplayed a retaliatory strike by Israel,” Saxo Bank said in a Friday note.
The $5 a barrel trading range in oil prices over the past week has been driven by traders attempting to “quantify the level of risk premium needed to reflect heightened tensions but with no impact on supply,” the bank said, adding “Expect prices to bid ahead of the weekend.”
At the time of writing Brent was trading at $87.34 and WTI at $83.14.
