Canadian crude oil prices are expected to strengthen and natural gas prices are expected to continue to improve into 2020, according to professional services company Deloitte Canada.
“We’re really expecting 2020 to be a lot more constructive for oil and gas producers here in Canada this year than it was in 2019,” Andrew Botterill, national oil and gas leader with Deliotte Canada and the forecast’s author, told Global News.
“A little bit better on the oil market but for sure better for natural gas.”
In an oil and gas price forecast released Tuesday, Deloitte said it expects Canadian crude prices to rise moderately as a supply glut is drawn down by topped-up takeaway capacity via rail and pipeline, as well as because of the effects of extended production curtailments in Alberta.
“As much as they weren’t necessarily are sought after by industry, [curtailments] were kind of needed,” Botterill said. “And I think we’re going to see those come to an end here in 2020.”
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The eight-day CN Rail strike in late November and the 11-day shutdown of the Keystone XL pipeline from a 1.4-million-litre spill in early November increased crude stores, driving down Alberta oil prices and expanding the differential with the price of WTI in 2019.
November’s events also led to the Kenney government to extend production curtailment — initially put in place by the Notley government — to January 2020.
In the forecast, Botterill said curtailment “should have a positive impact on Canadian oil prices.”
Botterill said that with global crude prices sitting around US$55 to US$60, Canadian companies are still able to bring on production.
“We are in a place where there’s a relatively nice balance and we’re able to manage that right now,” the Delliotte partner said. “So that’s why it might be more constructive in oil this year for Canadians with curtailments.
“It’s not that we think it’s going to be on the backs of the dramatic price increase; it’s just going to be in some more stability for Canadian producers.”
Botterill noted that crude debottlenecking projects, like the construction of the federally owned Trans Mountain expansion project and the restoration of Enbridge’s Line 3 pipeline, could add up to 580,000 barrels per day of additional shipping capacity. That represents 10 per cent of Canada’s daily oil production and is about equivalent to the country’s oversupply that dragged down the price of Canuck crude.
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“I think seeing those projects go forward starts to create the room that I think we start to see curtailment come off and start to see more constructive conversations about deploying capital,” Botterill said.
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Canadian oil producers will be seeing reduced pressures from competition stateside.
The Deloitte forecast said growth in U.S. oil production is slowing while the U.S. Energy Information Administration expects the country to continue as a net exporter of oil in 2020. Lower return on investments in the form of new wells put downward pressure on the oil sector of Canada’s southern neighbour.
U.S. companies are also “feeling the tightening of purse strings as the oil and gas industry continues to receive opposition regarding carbon intensity,” Deloitte said in its forecast.
Natural gas to see extended highs
Natural gas will provide a ray of hope for Canada’s energy sector in 2020, according to Deliotte.
Lower natural gas storage levels have helped boost Alberta’s gas trading prices. Low production levels — stemming from volatile and depressed AECO pricing in 2019 — have helped keep Alberta’s gas supplies low.
“Fortunately for producers, there are signs these higher prices could last beyond the winter months, which could provide some much-needed relief to their balance sheets,” Botterill said.
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A glut of U.S. natural gas should allow for more Canadian natural gas to get to market, according to Botterill.
“The major pipeline companies in Canada have been working with producers over the last year on different takeaway capacity and different agreements that I think are going to make Canadian gas prices a lot more competitive,” Botterill said.
The December 2019 Deloitte forecast marks a trimming of its September 2019 expectations in Canadian oil prices from just above US$70 per barrel to just under the US$70 mark, with a modest upward trend through 2023.
However, Deliotte analysts increased their expectations of natural gas from the fall forecast, with increases through 2023.
In December 2018, Botterill estimated conservatively for oil and gas in 2019.
Botterill predicted Edmonton light oil average prices would be US$65.80 per barrel and the commodity outperformed by US$2.98 in 2019.
He overestimated the performance of natural gas, predicting 2019’s average price to be US$1.50 per thousand cubic feet, higher than the actual average of US$1.45.
Leveraging tech and scale
One area Deloitte analysts said Canadian oil and gas companies are not taking full advantage of is embracing digital and innovative programs.
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“We don’t expect high commodity prices to return soon so innovations must deliver value at a time of volatility caused by environmental policies and regulator constraints,” Ian Proctor, Deloitte Digital partner, said in a statement.
Proctor pointed to innovations improving health and safety, reducing operating expenses, enabling the workforce and increasing profitability as priorities for the oil and gas sector.
Botterill said junior and intermediate oil producers have recognized the need to join larger companies in leveraging technology to help improve margins.
“They recognize that if they’re going to produce their barrels, they’re going to have to do so at a competitive cost as well and a good margin,” Botterill said.
“Oil and gas companies are quick adapters to technology, especially when it looks to drilling. But I think now a lot of that technology is coming into day-to-day operations, how to focus on margins.”
Botterill said production curtailment has had “a negative effect on the country’s merger and acquisition markets, particularly on prospective deals involving junior and intermediate producers.”
He pointed to the M&A activity totalling just $600 million in the third quarter of 2019, less than 20 per cent of the same activity a year earlier.
Botterill said curtailment put a damper on any interest in mergers and acquisitions.
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“It’s a tricky dance that I think comes down to who has capital and can we create situations where shareholders and companies feel that they can make a better vehicle going forward?” Botterill said.
“I think size and scale [are] going to certainly be a good story for the next few years, and so we might see some mergers or equals like that.”
SAINT PAUL, Minn. – Joel Eriksson Ek scored two goals and added three assists as the Minnesota Wild grounded the Winnipeg Jets 8-5 in NHL pre-season action on Friday.
Kirikk Kaprizov had two power-play goals for the Wild, who scored seven goals in the second period to break open a tight game.
Ben Jones, Mats Zuccarello, Liam Ohgren and Marat Khusnutdinov also scored for the Wild who got a 36-save performance from netminder Marc-Andre Fleury. Thirteen players had at least one point for the Wild in the lopsided win.
Cole Perfetti, Mason Appleton, Nikita Chibrikov, Brayden Yager and Morgan Barron scored for the Jets, who had two power-play goals.
The teams were tied 1-1 after the first period and the Wild took an 8-2 lead into the final frame.
Connor Hellebuyck allowed eight goals in two periods of play, stopping 21 of 29 shots. Thomas Milic stopped all six shots he faced in the final period.
UP NEXT
Jets: Host the Calgary Flames on Wednesday.
Wild: Host the Dallas Stars on Sunday.
This report by The Canadian Press was first published Sept. 27, 2024.
WINNIPEG – Zach Collaros threw a career-high six touchdown passes to ignite the Winnipeg Blue Bombers in a 55-27 victory over the Edmonton Elks that extended their win streak to seven games and clinched a playoff spot for the eighth consecutive season.
Winnipeg’s first four series of the game resulted in TD catches by Nic Demski, Keric Wheatfall and Brady Oliveira, plus a field goal by Sergio Castillo.
The explosion of points had the team’s third straight sellout crowd of 32,243 at Princess Auto Stadium cheering wildly as the CFL West Division-leading Blue Bombers improved to 9-6.
The Elks dropped to 5-10 and have a flicker of a chance to still make the CFL playoffs.
Collaros completed 21 of 26 pass attempts for a season-high 432 yards with the six touchdowns and no interceptions. His career best for passing in a game is 439 yards.
Edmonton quarterback McLeod Bethel-Thompson, who got the start ahead of Tre Ford, had a tough night against Winnipeg’s stifling defence. He was 19-of-34 passing for 223 yards with three TDs and no picks.
Winnipeg led 17-0 after the first quarter, 34-6 at halftime and 41-20 heading into the fourth.
Demski had a pair of TD receptions for 40 and 11 yards, while Kenny Lawler added two majors with catches of six and seven yards.
Lawler finished with a game high of 130 yards off eight catches and Demski had four receptions for 117 yards.
Wheatfall took a pass and turned it into a 61-yard major and Oliveira grabbed a short toss and deked and dashed 33 yards into the end zone.
Winnipeg defensive end TyJuan Garbutt scooped up a fumbled Edmonton pass attempt and ran 62 yards for a TD.
Castillo connected on field goals from 39 and 33 yards and made seven converts.
Edmonton kicker Boris Bede booted an 18-yard field goal at 10:10 of the second quarter to get the visitors on the board. He added a 24-yarder as time expired on the first half and made three converts.
Eugene Lewis, Tevin Jones and Dillon Mitchell each had TD catches for the Elks.
Edmonton’s fortunes turned early.
On Winnipeg’s first series of the game, Lawler fumbled a catch the Elks recovered but a review deemed Lawler had been down by contact.
Three plays later, Collaros fired the ball to Demski in the end zone at 3:04 and Castillo hit the convert to begin spinning the numbers on the scoreboard.
Edmonton’s first four possessions ended with three punts and a turnover on downs.
Collaros used the turnover for a TD pass to Wheatfall and 17-0 lead at 12:49 of the first quarter.
At that point in the game, Bethel-Thompson had completed one of three passes for nine yards. Collaros was 6-of-7 for 143 yards.
Oliveira made his run to the end zone at 1:09 of the second quarter, followed by Garbutt’s fumble-recovery TD at 6:45 to make it 31-0.
Three field goals ended the first half.
Lewis, Lawler and Jones provided three touchdowns for the third-quarter scoring that cut Winnipeg’s lead to 41-20.
Demski added his second TD of the game 23 seconds into the fourth, followed by Lawler’s stretching grab in the end zone at 7:06 to boost the lead 55-20.
Mitchell recorded his 37-yard TD catch as time expired.
UP NEXT
Elks: Host the Saskatchewan Roughriders on Saturday, Oct. 5.
Blue Bombers: Visit the Hamilton Tiger-Cats on Friday.
This report by The Canadian Press was first published Sept. 27, 2024.
TORONTO – Xavier Edwards made franchise history on Friday by becoming the first Miami Marlins player to record three triples in a single game. His achievement helped the Marlins crush the fading Toronto Blue Jays 15-5 at Rogers Centre.
Edwards emerged as Miami’s hero early in this contest, smacking his first triple in the second inning and finishing the contest 3-for-5 with four RBIs. In addition to setting a franchise record, the 25-year-old became the first Major League Baseball player with three triples in a single game since 2014.
“It’s definitely cool to get an opportunity to run at full speed and get to open it up,” Edwards said of his impressive evening.
The Marlins (60-100) broke through early, plating three runs in the first inning off Jays’ starter Jose Berríos. Miami built some heavy momentum and never slowed down, recording 17 hits.
Jonah Bride was also an integral part of the Marlins victory. The Marlins infielder hit two homers, his 10th and 11th of the season, and drove in three RBIs to secure Miami’s lead.
The Blue Jays (74-86) came up short in their 12-hit effort, which included Ernie Clement’s solo homer in the fourth inning, his 12th of the season. Vladimir Guerrero Jr. added two singles and an RBI, bringing him one hit shy of 200 on the season, while Alejandro Kirk extended his hitting streak to 18 games.
“We didn’t pitch well at all,” said Blue Jays manager John Schneider. “I think effort and compete — that was there. (We’ll) move on to tomorrow.”
Berríos (16-11) took the loss, allowing six earned runs on six hits in just three innings of work, marking his shortest start of the season. The right-hander also struck out four batters and yielded three walks.
“Frustrating that that’s his last outing for the year,” said Schneider, summarizing Berríos’ season. “But I think, looking at his overall body of work, he should be really proud of the things that he did on and off the field.”
The Marlins quickly extended their lead in the second inning as Otto Lopez singled, Kyle Stowers walked, and Nick Fortes advanced the runners with a sacrifice bunt. Edwards capped off the Marlins rally with a two-run triple off Berríos.
The Blue Jays responded against Marlins starter Adam Oller (2-4) in the bottom of the third, as Nathan Lukes doubled off the right-field wall, scoring Leo Jiménez from second. Spencer Horwitz singled up the middle, driving in George Springer and Lukes two batters later.
Oller earned the win for the Marlins, pitching five innings and allowing four earned runs on eight hits while striking out three.
The Marlins poured it on with five runs in the seventh inning. Griffin Conine homered, Edwards picked up his third triple of the night, and Jake Burger, after driving in a run earlier, doubled for his team-leading 76th RBI of the season.
The Rogers Centre roof opened an hour before first pitch, revealing cloudy skies. Announced attendance was 31,597, and the game lasted three hours, seven minutes.
SCHUMAKER LEAVES THE TEAM
Midway through Friday’s game, the Marlins announced manager Skip Schumaker would miss the remaining two games of the season due to a family medical issue. Bench coach Luis Urueta will manage in Schumaker’s place.
MARLINS MAKE A MOVE
Before the game, Miami placed reliever Declan Cronin (3-4) on the 15-day injured list with left knee patellar tendinitis and activated right-hander Mike Baumann (3-1) from the paternity list.
ROTATION SHUFFLE
Blue Jays starter Chris Bassitt (10-14) will not pitch in Sunday’s series finale against the Marlins, Schneider announced Friday. With the Jays eliminated from playoff contention, the Jays skipper said he prefers to rest Bassitt and let other pitchers see some action.
UP COMING
The Blue Jays send right-hander Yariel Rodríguez (1-7) to the hill for the second leg of this three-game series on Saturday. The Marlins have not yet announced a starting pitcher for Saturday.
This report by The Canadian Press was first published Sept. 27, 2024.
