2$ to 3$ a litre gas this summer

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My shipping surcharges are at 32% right now and we are being warned they are going up again. Expect high food prices and other goods passed onto consumers to offset.
 
Clint r said:
No mention of over a billion dollars in subsidies Canadians pay to oil companies in that article. No mention of all the jobs shipped out of country instead of kept in Canada building, maintaining and refining our raw resources. Sad we’ve been brainwashed into thinking it pro Canadian to support other countries economy’s with our raw resources. Not just oil either but our trees too. Those same companies will tell you it’s too expensive to build another refinery but we can build two for the cost of the TMX so some ones lying to us. Can’t wait til we find out who.
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Considering oil & gas directly contributes over $10 B annually to provincial and federal governments (and that was before prices started moving up last year), plus generates 400k direct jobs, a 10X return on the "subsidies" sounds like a pretty good investment. Not to mention that every Canadian who contributes to a pension has exposure to oil & gas companies.

The "why don't we build refineries" argument doesn't understand that the cost of shipping oil is tiny compared to the cost of building a new refinery so the return on capital for building a new refinery - or even changing a refinery to take advantage of a different type of crude - doesn't make economic sense. TMX on the other hand allows Canadian crude to get market pricing, rather than being captive to a US market that is purchasing at a discount. Not only does this mean raise the price of oil coming down the pipeline, but unlocks value for barrels being sold to the US via other routes (rail, trucking, other pipelines).

The oil industry the worlds largest industry and also the most globally integrated, and like all commodities prices are driven by supply and demand. The lack of supply now is due to 100's of billions in capex that was taken out of the system due to low oil prices from 2015 through to last year. And taking out the pandemic, global demand continues to grow year over year. While there is some economic risk premium in the oil price right now due to Putin's spring break trip to Ukraine (which is being tempered by the COVID situation in China and its effect on demand) the trend towards higher prices has been seen for a while.

Fortunately there is a simple solution, as the old saying goes, "The best cure for high oil prices, is high oil prices" (with corollary of low oil prices being true as well as we are currently seeing).
 
CBsqrd said:
The oil industry the worlds largest industry and also the most globally integrated, and like all commodities prices are driven by supply and demand. The lack of supply now is due to 100's of billions in capex that was taken out of the system due to low oil prices from 2015 through to last year. And taking out the pandemic, global demand continues to grow year over year. While there is some economic risk premium in the oil price right now due to Putin's spring break trip to Ukraine (which is being tempered by the COVID situation in China and its effect on demand) the trend towards higher prices has been seen for a while.
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Not to mention we are reducing emission and that is essentially a government imposed cap on production.
 
CBsqrd said:
Considering oil & gas directly contributes over $10 B annually to provincial and federal governments (and that was before prices started moving up last year), plus generates 400k direct jobs, a 10X return on the "subsidies" sounds like a pretty good investment. Not to mention that every Canadian who contributes to a pension has exposure to oil & gas companies.

The "why don't we build refineries" argument doesn't understand that the cost of shipping oil is tiny compared to the cost of building a new refinery so the return on capital for building a new refinery - or even changing a refinery to take advantage of a different type of crude - doesn't make economic sense. TMX on the other hand allows Canadian crude to get market pricing, rather than being captive to a US market that is purchasing at a discount. Not only does this mean raise the price of oil coming down the pipeline, but unlocks value for barrels being sold to the US via other routes (rail, trucking, other pipelines).

The oil industry the worlds largest industry and also the most globally integrated, and like all commodities prices are driven by supply and demand. The lack of supply now is due to 100's of billions in capex that was taken out of the system due to low oil prices from 2015 through to last year. And taking out the pandemic, global demand continues to grow year over year. While there is some economic risk premium in the oil price right now due to Putin's spring break trip to Ukraine (which is being tempered by the COVID situation in China and its effect on demand) the trend towards higher prices has been seen for a while.

Fortunately there is a simple solution, as the old saying goes, "The best cure for high oil prices, is high oil prices" (with corollary of low oil prices being true as well as we are currently seeing).
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I’m not sayin that oil companies don’t create Canadian jobs. Im telling you that every job our oil or lumber or grain or potatoes creates outside of Canada is one less job going to an actual Canadian. Saying oil companies are pro Canadian is misleading. Oil companies are pro $$$.
 
wildmanyeah said:
They don't have any profits because there still swimming in debt
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welcome to the commodity business. A couple amazing years followed by a decade in the dumps.

Companies are trying to be responsible and fixing their balance sheets with this sudden surge in prices. They also took huge write down on their asset values over the past few years (since 2014), so lower DD&A charges creates higher earnings today.

We (as a society) have benefited tremendously from low inflation, declining commodity prices, cheap capital / declining interest rates and rapid technological advancement. This has reversed sharply since the Covid low. Hopefully it moderates or else I’m not sure if we are ready for what that might entail.
 
CBsqrd said:
Considering oil & gas directly contributes over $10 B annually to provincial and federal governments (and that was before prices started moving up last year), plus generates 400k direct jobs, a 10X return on the "subsidies" sounds like a pretty good investment. Not to mention that every Canadian who contributes to a pension has exposure to oil & gas companies.

The "why don't we build refineries" argument doesn't understand that the cost of shipping oil is tiny compared to the cost of building a new refinery so the return on capital for building a new refinery - or even changing a refinery to take advantage of a different type of crude - doesn't make economic sense. TMX on the other hand allows Canadian crude to get market pricing, rather than being captive to a US market that is purchasing at a discount. Not only does this mean raise the price of oil coming down the pipeline, but unlocks value for barrels being sold to the US via other routes (rail, trucking, other pipelines).

The oil industry the worlds largest industry and also the most globally integrated, and like all commodities prices are driven by supply and demand. The lack of supply now is due to 100's of billions in capex that was taken out of the system due to low oil prices from 2015 through to last year. And taking out the pandemic, global demand continues to grow year over year. While there is some economic risk premium in the oil price right now due to Putin's spring break trip to Ukraine (which is being tempered by the COVID situation in China and its effect on demand) the trend towards higher prices has been seen for a while.

Fortunately there is a simple solution, as the old saying goes, "The best cure for high oil prices, is high oil prices" (with corollary of low oil prices being true as well as we are currently seeing).
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Except that this time, the oil companies don’t seem particularly interested in ramping production. Balance sheet repair and cash to shareholders are the priority.

Gov’t attitude towards the industry is a deterrent to investment.

Global production decline rate is probably north of 5% per year.
 
Corey_lax said:
I think it was around the same price as diesel last time I filled up. I’m envious of you gas guzzlers
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I remember when for many years diesel was way cheaper than gas. What happened?
I also remember when marked gas with it's greatly reduced govt. road taxes was also a way cheaper than standard road gas, but not now. What happened there?
 
Rockfish said:
I remember when for many years diesel was way cheaper than gas. What happened?
I also remember when marked gas with it's greatly reduced govt. road taxes was also a way cheaper than standard road gas, but not now. What happened there?
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ULSD. ultra low Sulphur Diesel requirements. Requires more refining in turn has driven the price of diesel up. In marine fuel the ethanol additives at the mid grade level in marked fuel has made it unstable in long storage so we've seen a switch to ethanol free fuels at the gas dock which are more expensive (premium)
 
littlechucky said:
Except that this time, the oil companies don’t seem particularly interested in ramping production. Balance sheet repair and cash to shareholders are the priority.

Gov’t attitude towards the industry is a deterrent to investment.

Global production decline rate is probably north of 5% per year.
Click to expand...
Production isn't like a faucet that can be turned on and off based on the whims of the market. Capex decisions are planned years in advance and take time to implement whereas oil prices started the current move up in November of last year. My prior point was that without all the capital that would have been spent over the previous seven years on finding new fields if oil prices had been higher, there is now no ready inventory of discoveries under development to bring on near term additional production. Not to mention the permitting process to drill a new well in some countries can take 6 - 18 months.

In the last cycle we had new discoveries in places like deepwater Brazil, Falkland Islands, offshore West Africa and the Norwegian North Sea add billions of barrels of proven and probable reserves. That's on top of shale oil in the US and a big step up in Canadian oil sands production, which our current government won't be behind this cycle. Where have the big discoveries been over the last 10 years that are near to coming online? There has been some recent exploration success offshore Namibia and offshore Guyana, but those are expensive developments that are going to take years to reach first production. In the meantime, existing fields have been declining (5% a year is good estimate, if on the low side), and adding meaningful new production from them is not going to be fast or cheap - the easiest / lowest cost oil from a field is always going to be produced first.
 
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