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Oil Prices Fall Back Below $60 – OilPrice.com

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Oil Prices Fall Back Below $60 | OilPrice.com


Tom Kool

Tom Kool

Tom majored in International Business at Amsterdam’s Higher School of Economics, he is Oilprice.com’s Head of Operations

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Oil prices have fallen back below $60 but remain at levels not seen since January 2020.

In this week’s Global Energy Alert, our investing team breaks down the best way to trade the Texas freeze. Sign up today to get breaking news, expert analysis, and trading tips.

Friday, February 19th, 2021

The Texas electricity crisis is easing, but the outages, damage, and human toll were historic. As of Friday morning, Texas grid operator ERCOT said that it would be emerging from “emergency conditions” later in the day. After a crazy week, WTI fell just a bit but held onto gains close to $60, a price not seen since January 2020. 

Texas outage eases. As of Tuesday, around 45 gigawatts of electricity generation from renewables, coal, and natural gas were offline. More than 4 million people lost power. By Friday, most of those people saw power restored. The crisis has once again focused attention on several grid policy questions – the lack of weatherization at Texas power generation assets, the lack of a capacity market, and the state grid’s isolation from the rest of the country.

U.S. oil production impacted. Around 4 mb/d of U.S. oil production was sidelined due to power outages, wellhead freeze overs, and other equipment failures. Most of the outages were in the Permian Basin. Restarting frozen or shuttered wells is not necessarily straightforward, and some restarts could take weeks. 

Related: Is This Oil Rally The Start Of Something Much Bigger?

Texas bans shipment of natural gas out of state. Texas Governor Greg Abbott took the drastic move of banning the export of natural gas from the state in order to conserve supply. The move is highly controversial and potentially illegal, although most analysts note that any legal challenges would be moot because the order will have expired by the time a judge reviews them. The Governor also personally sent requests to several LNG exporters to halt operations. 

LNG cargoes canceled. At least 10 LNG cargoes were canceled because of the grid crisis, according to Bloomberg.

Refinery restarts could take weeks. Four of Texas’ largest oil refineries saw widespread damage from the cold snap and could take weeks to repair, according to Bloomberg. The outages could reduce demand for crude, but cut the supply of refined products. The four refineries include ExxonMobil’s (NYSE: XOM) Baytown and Beaumont plants, Marathon Petroleum’s (NYSE: MPC) Galveston Bay refinery, andTotal’s (NYSE: TOT) Port Arthur facility. The result could be $3-per-gallon gasoline by May. 

The U.S. wants to reopen talks with Iran. The U.S. government said it would accept an invitation from the EU to hold talks with Iran. Iran did not exactly jump at the news, saying it would “immediately reverse” recent actions on its nuclear program, but only after the U.S. lifted sanctions. 

Gas companies hit “jackpot” on Texas deep freeze. While Texans are struggling to keep the lights and the heating on, gas producers in the Lone Star state, or at least those whose wellheads did not freeze, are having a blast.

Saudi Arabia to increase output. Saudi Arabia is poised to reverse its 1-mb/d voluntary production cut in the coming weeks, according to the Wall Street Journal, with the returned barrels hitting the market in April. “A Saudi increase in production…makes perfect sense given the tightness that is starting to emerge in the market,” Ole Hansen, head of commodity strategy at London-based Saxo Bank, told the WSJ. “The market will probably take it quite well.”

Shell to sell Alberta assets for $900 million. Royal Dutch Shell (NYSE: RDS.A) will sell its Duvernay shale assets in Alberta for $900 million to Crescent Point Energy Corp. (TSE: CPG). Related: Oil Prices Soar As U.S. Oil Production Plunges 30%

Maersk plans carbon-neutral shipping containers. Shipping giant A.P. Moller Maersk A/S is accelerating plans to transition to carbon-neutral operations, including plans to add the first container ship running on biofuels.

U.S. shale sticks with restraint, for now. With WTI surging to $60 per barrel, the U.S. shale industry could be in a better financial position than previously expected. Recent comments from shale executives suggest that drillers won’t return to aggressive spending plans, instead focusing on cash generation. 

Canadian gas drilling on the rise. Canadian shale gas drilling has increased rapidly this year, and Canadian gas exports to the U.S. is also on the rise. Canada’s drillers are hoping to capture more market share as U.S. drillers have cut back. 

Texas freeze raises the cost of charging a Tesla to $900. The electricity shortage in Texas amid the cold snap has sent spot electricity prices soaring so much that the surge in power prices equals a cost of $900 for charging a Tesla.

$100 oil possible on commodity supercycle. Several investment bank analysts say that oil could spike to $100 per barrel because we could be at the beginning of a new commodity supercycle.

Egypt to restart a second LNG plant. Egypt is close to restarting a second LNG facility after being closed for eight years. The restart boosts Egypt’s hopes of developing a major natural gas hub and LNG export industry.

Shell’s Nigerian accounts frozen in a court dispute. A Nigerian court restricted Royal Dutch Shell’s (NYSE: RDS.A) access to its bank accounts in the country over a years-long legal dispute.

By Tom Kool for Oilprice.com

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7 Reasons Why America Loves Doing Business with Canada

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Canada is one of the United States’ most important trading partners. According to the United States Census Bureau, Bureau of Economic Analysis, the US exports over $300B worth of goods and services to Canada annually. It also imports over $300B worth of goods and services from the country every year.

In fact, the trade relationship between the two North American countries is the biggest in the world. The two nations have traded for over 100 years. And a strong trade relationship is prosperous for both countries.

So, what makes Canada such an excellent trading partner for the United States? Here are a few good reasons:

1. Geographical Location

Canada shares a large border with the United States. Trading with Canada is easy by road, boat, or air. Most of the economic hotspots in Canada like Toronto, Vancouver, and Calgary are just a short flight away from an American city.

2. Manufacturing Strengths

Canada has some exceptional exports thanks to its vast manufacturing strengths. Here are a few of its two products:

  • Non-renewable Energy: Canada’s non-renewable energy exports like oil and gas are a significant part of its economy. Although falling gas prices have impacted this sector, Canada continues to depend on its gas and oil exports.
  • Composite Manufacturing: You’ll find plenty of world-class options if you’re looking for advanced composite manufacturing in Canada regardless of your industry. The Canadian composite manufacturing industry serves many national and international clients in sectors such as defence, transportation, marine, aerospace, medical, industrial, energy, home appliances, construction, and more.
  • Vehicle: Canada has a renowned automotive sector, producing light trucks, crossovers, SUVs, etc., with its technologically advanced factories. 95% of Canada’s automotive exports go to the United States.
  • Aluminum: The Great White North produces some of the best quality aluminum in the world. The United States happens to be Canada’s biggest importer of aluminum.
  • Meat and Dairy: Canada produces meat, beef, poultry, and dairy known for its quality. Unlike some countries, Canada doesn’t use harmful hormones in its meat industry.

3. Good Tax Treaties

Canada has many provisions that make business favourable for American companies. For example, a non-resident corporation that does not otherwise have a permanent establishment (PE) in Canada may do business without paying income tax on its profits. Canada also offers favourable corporate taxes, especially compared to the United States.

Aside from federal incentives, many provinces offer provincial incentives to do business in Canada. For example, many American films and TV shows are shot in Toronto because of lucrative tax enticements.

4. Favourable Exchange Rates

Not only is the Canadian dollar stable, but it usually hovers 20% lower than the United States. The favourable exchange rate makes it cost-effective for the United States to import goods and services from Canada.

However, the exchange rate isn’t so low that it discourages Canadians from travelling to the United States or buying American products. Many economists consider the exchange rate to be in the sweet spot.

5. Similar Culture

Canada speaks the same language, eats the same food, plays the same sports, and consumes the same entertainment. A similar coculture without language barriers makes it easier for Americans to do business with Canada.

Of course, there are some parts of Canada where French is the most popular language. Likewise, Spanish is more prevalent in certain places in the United States. However, these issues are easily overcome with business cards, translators, and technology.

6. Prominent Tech Industry

Many American technology companies are doing business with Canada because of the country’s prominence on the tech stage. For example, Toronto produces more tech occupations than the Bay Area, New York, and even Silicon Valley.

Toronto also has over 2,000 startups and over 14,000 tech companies. In the MaRS Center, Canada also has one of the world’s largest innovation hubs. Canada is also the first nation in the world to develop a national AI strategy. There are over 500 international AI firms in the country. The world’s biggest concentration of AI startups is in Canada.

Besides the national AI strategy, there is plenty of other support for tech development in the country that’s attractive to the United States. Canada invested $900m in high-tech innovation and funded startup incubators in 2015.

Additionally, Canada offers many tax breaks to companies for research and development. It also provides special visa programs for investors and entrepreneurs in the tech industry.

7. Qualified Labour Pool

Canada has the second-highest tertiary education levels worldwide for people between the ages of 25 and 34, according to the Organisation for Economic Co-operation and Development (OECD). Canada’s highly skilled workforce stands at nearly 1.5 million people. Canada’s tech talent is also ranked highly for diversity.

These are just some of the many reasons why the United States enjoys doing business with Canada. Even with the economic climate changing, you can expect the partnership between the two countries to stand the test of time.

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10 Ways to Make Your LinkedIn Profile Stand Out in 2021 – Part 2

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Last week I provided 5 suggestions on how you can make your LinkedIn profile, which in 2021 is a non-negotiable must-have for job seekers, to stand out. The suggestions were:

 

  1. Add a headshot
  2. Create an eye-catching headline
  3. Craft an interesting summary
  4. Highlight your experience
  5. Use visual media

 

I’ll continue with my next 5 suggestions:

 

  1. Customize your URL

 

Your LinkedIn URL (Uniform Resource Locator) is the web address for your profile. The default URL will have your name and some random numbers and letters (https://www.linkedin.com/in/nick-kossovan-647e3b49). Customizing your profile URL (https://www.linkedin.com/in/nickkossovan/) makes your profile search engine friendly; therefore, you’re easier to find. As well a customized URL invites the person searching to make some positive assumptions about you:

 

  • You’re detail oriented.
  • You’re technologically savvy.
  • You understand the power of perception (Image is everything!).

 

James Wooden, one of the most revered coaches in the history of sports, is to have said, “It’s the little details that are vital. Little things make big things happen.”

 

To change your profile URL, go to the right side of your profile. There you’ll find an option to edit your URL. Use this option to make your URL concise and neat.

 

  1. Make connections

 

The more connections you have increases the likelihood of being found when hiring managers and recruiters, looking for potential candidates with your background, search on LinkedIn. Envision your number of connections as ‘the amount of gas in your tank.’

 

At the very least, you should aim to get over 500 connections. Anything below 500 LinkedIn will indicate your number of connections as an exact number (ex. 368). Above 500 connections, LinkedIn simply shows you have 500+ connections. Getting to 500 implies you’re a player on LinkedIn.

 

As much as possible, connect with individuals you know personally, have worked with, met in a professional capacity (tradeshow, conference), is in your city/region and industry/profession. If you’d like to connect with someone you haven’t met, send a note with your request explaining who you are and why you’d like to connect. (This’ll be my topic in next week’s column.)

 

  1. Ask for recommendations and skill endorsements

 

This is vital to making your profile stand out! Employers want to know that others think of your work.

 

When asking for a recommendation, or skill endorsements, think of all the people you’ve worked the past. Don’t just think of your past bosses; also think of colleagues, vendors, customers — anyone who can vouch for your work and professionalism.

 

Instructions on how to ask for, and give, a recommendation, can be found by going to the LinkedIn ‘Help’ field (Located by clicking on the drop-down arrow below the ‘Me’ icon in the upper right-hand corner.) and typing ‘Requesting a recommendation.’ Do the same for skill endorsements.

 

TIP: It’s good karma to write recommendations, and endorse skills, in return and to give unsolicited.

 

  1. Keep your profile active

 

LinkedIn is not simply an online resume — it’s a networking social media site. To get the most out of LinkedIn, you need to be constantly active (at least 3 times per week). Write posts and articles. Check out what is being posted, especially by your connections. Like and share posts that resonate with you. Engage with thoughtful comments that’ll put forward your expertise.

 

Join groups that align with your industry and professional interests. Groups are an excellent way to meet like-minded professionals with whom to network and share ideas and best practices.

 

  1. Check your LinkedIn profile strength

 

It’s in LinkedIn’s interest that you’re successful using their platform. Therefore, they’ve created a ‘Profile Strength Meter’ to gauge how robust your profile is. Basically, this gauge tells you completion level of your profile. Using the tips, you’ll be given, keep adding to your profile until your gauge rates you “All-Star.” For instructions on how to access your ‘Profile Strength Meter,’ use the LinkedIn’ Help’ field.

 

The 10 tips I offered is a starting point for building a LinkedIn profile that WOWs! Jobseekers need to make the most of their profile to stand out in a sea of candidates, sell their skills, and validate their accomplishments. Make it easy for the reader to get a feel for who you are professionally.

_________________________________________________

Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers advice on searching for a job. You can send him your questions at artoffindingwork@gmail.com.

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Canadian National beats Canadian Pacific with $33.6 billion Kansas City bid

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U.S. railway operator Kansas City Southern said on Thursday that it had accepted Canadian National Railway Co’s $33.6 billion acquisition offer, upending a $29 billion deal with its competitor Canadian Pacific Railway Ltd.

The development, first reported by Reuters, gives Canadian Pacific five business days to make a new offer for Kansas City Southern. Were Canadian Pacific to table a new offer, a bidding war could ensue.

Canadian Pacific had previously announced a deal to buy Kansas City Southern on March 21, before Canadian National said it had submitted a higher bid on April 20. The headline price in Canadian National’s cash-and-stock bid remains $325 per share as originally announced, though the company offered more of its shares to compensate for a decline in its stock price.

Canadian National has offered to cover the $700 million break-up fee Kansas City Southern will owe Canadian Pacific Railway Ltd. It will also pay Kansas City Southern $1 billion if the U.S. Surface Transportation Board (STB) rejects a voting trust structure it has put forward to complete the deal.

“We believe that Canadian Pacific’s negotiated agreement with Kansas City is the only true end-to-end Class I combination that is in the best interests of North American shippers and communities,” a Canadian Pacific spokeswoman said.

Canadian Pacific and larger rival Canadian National are in a race to take over the U.S. railroad operator, which would create the first direct railway linking Canada, the United States, and Mexico.

Either of them acquiring Kansas City Southern would create a North American railway spanning the United States, Mexico and Canada, as supply chains recover from COVID-19 pandemic-led disruptions.

The acquisition interest in Kansas City Southern also follows the ratification of the U.S.-Mexico-Canada Agreement last year that removed the threat of trade tensions, which had escalated under former U.S. President Donald Trump.

The STB last week approved the voting trust for Canadian Pacific’s proposed acquisition. Canadian National has offered an identical arrangement.

(Reporting by Sanjana Shivdas in Bengaluru; Editing by Shailesh Kuber, Aurora Ellis and Richard Chang)

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