SHOULD WE BE WORRIED ABOUT OIL’S RAPID DESCENT? After having tracked steadily upward from a sub-$30 valley reached in early 2016, crude oil abruptly reversed course in mid-October, plunging by almost a third in just a few weeks. Because oil and gas remain key inputs to global growth, concerted price moves can sometimes provide clues to underlying economic health, even before changes in course show up in GDP and other key figures. If, for example, price is falling due to a drop-off in demand, it’s not unreasonable to surmise that general business activity has also cooled.
Click here to read more: DM-Monthly-Report-Dec-18
CANADIAN OIL: WHAT’S THE DIFFERENTIAL? Beginning in August of 2018 the differential between Western Canadian Select (WCS) and West Texas Intermediate (WTI) widened from <US$20/bbl to $50/bbl. In this note we will address why differentials have increased, our rationale for an average $25-$30/bbl differential in 2019, the low $20’s/bbl in 2020, and a longer-term view. In sum, we do not believe that panic is warranted.
The writing has been on the wall that a sub-$20/bbl differential was not sustainable. Utilizing Canadian production forecasts from CAPP and adding up available pipeline capacity, a clear gap between the two was emerging for late 2018/2019. With no pipeline capacity expected to start until late 2019, this production would have to be transported by rail.
Click here to read more: Cardinal Update – December 2018
Are you crazy for the holidays, spending thousands of dollars on holiday gifts, lights, entertaining, food and decorations each year? If so, you’re not alone. Many Americans feel the sting of holiday spending well into the new year. If you love to celebrate the holidays but don’t love the financial pinch you experience afterward, there are several great tricks for giving and celebrating, without breaking the bank. Read more