That Pipeline

[trysail]

BC and Alberta...west coast

Newfoundland...east coast

I'll be a sonofabitch. Yanno, that just never occurred to me.


Gosh, the next thing ya know, you'll be informing us about ursine forest defecatory practices.

 

[badbabysitter]

I'll be a sonofabitch. Yanno, that just never occurred to me.


Gosh, the next thing ya know, you'll be informing us about ursine forest defecatory practices.

right.... because there will never be any mishandling of the oil industry... no sirree bob


dumbass


seriously... whenever you open your mouth about Canada you just continue to show how uneducated you are on the subject

 

[chillywilly2]

right.... because there will never be any mishandling of the oil industry... no sirree bob


dumbass


seriously... whenever you open your mouth about Canada you just continue to show how uneducated you are on the subject

He believes what he reads on the internet and has a need to tell Canadians what is going on in their own country

 

[trysail]

...noise...

ROTFLMFAO

Nahanni N.P. (N.W.T.)
Algonquin N.P.
Ahmic
Magnetowan
Ontario
Trois Rivieres
Mt. Tremblant
Saskatchewan
Banff
L'anse aux Meadows
Toronto
Churchill
Chester, N.S.
etc., etc., etc.




http://www.bloomberg.com/news/2012-...6-unemployment-from-13-is-new-canada-way.html



Commuting to 4.6% Unemployment From 13% Is New Canada Way
By Greg Quinn
August 1, 2012

Kirk Penney has endured commutes of eight-hour flights and one-hour refueling stops between his home in Charlottetown, Newfoundland, and Canada’s booming oil industry out west for the past five years.

The 30-year-old electrician works 14 days in and seven out at Alberta-based Suncor Energy Inc.’s Firebag oil-sands project for contractor URS Corp., nearly tripling his pay to around C$150,000 ($149,500). He stays in touch with morning phone calls to his two young children and night calls to his wife.

“It provides a good lifestyle for my kids,” Penney said around dawn in Toronto’s airport at a stopover on a midnight flight from Fort McMurray, Alberta. “That’s the only reason I’m doing it. Living in Newfoundland is mostly hand-to-mouth.”

While Penney and his wife have talked about whether to move to Alberta, they have chosen to stay in Newfoundland, on Canada’s eastern coast. With two small kids, “we like the local atmosphere,” he said. “Everybody knows everybody.”

Long-distance commuters such as Penney are filling the gap in Canada’s labor market as western companies are desperate for workers to develop the world’s largest crude-oil reserves outside Saudi Arabia and Venezuela. Meanwhile, seasonal laborers in struggling forest and fishing towns in eastern provinces face government cutbacks in jobless benefits they draw on in off- seasons.

Federal rules starting this month may oblige frequent users of employment insurance to take a job that pays 70 percent of their past wages and in some cases to accept work that has a one-hour commute or face a cutoff of benefits that pay a maximum of C$485 a week.

Accelerate Exodus
Fisherman Michael McGeoghegan says the policies are another blow to a region suffering from drops of as much as 50 percent in the prices for some catches and will accelerate the exodus of young workers.

“The weather makes it seasonal; it’s not seasonal because we make it that way,” said McGeoghegan, president of the Prince Edward Island Fisherman’s Association, who has for 34 years hauled in lobster, scallops, crab, mackerel and herring. “We’re Canadian citizens, too; we have a right to live in the eastern part of Canada just like anybody else.”

The new requirements are needed to lower unemployment and bridge regional disparities, said Peter Jarrett, head of the Canada division for the Paris-based Organization for Economic Cooperation and Development.

“The incentives just weren’t there for many people to do something about their situation because they could survive on pogey,” he said in an interview in Ottawa, using slang for jobless payouts.

13 percent
Unemployment in Newfoundland was 13 percent in June, above the 4.6 percent rate for Alberta and 7.7 percent for Ontario, Canada’s most populous province. Alberta also paid the highest weekly wage of any province in May at C$1,057, compared with C$919 in Newfoundland and C$745 on Prince Edward Island, the country’s lowest.

Even with this lopsided performance, Canada has recovered lost output ahead of other Group of Seven nations after the 2008 global financial squeeze, according to Finance Minister Jim Flaherty’s latest annual budget presented in March.

Companies such as Enbridge Inc. and Cenovus Energy Inc., both based in Calgary, are pulling workers west as production of Canadian crude oil will more than double to 6.2 million barrels a day by 2030, according to the Canadian Association of Petroleum Producers. That suggests the demand for workers will increase, threatening to boost the cost of new pipelines and oil wells.

Labor Costs
“My concern really more is down the road,” Enbridge President Al Monaco said after a June 18 speech in Toronto. Liquefied natural-gas export projects in British Columbia, along with the company’s plans to pipe Alberta oil-sands crude oil to the Pacific Coast, “will certainly put a lot more pressure on labor costs going forward.”

Canada’s forestry employment has fallen by 4.2 percent this year to 38,700 while at mining and energy companies, the number of positions has risen 2.7 percent to 218,000, according to Statistics Canada, the nation’s economic-data agency. In 2007, forestry employment was 53,700, and mining and energy was 186,200.

A Newfoundland government study found that as many as 10,600 of its citizens had worked in Alberta in 2009 and 2010. That exceeded the roughly 6,200 employed on fishing boats in 2010 in a province whose beginnings were rooted in catching cod. Fishing and hunting jobs fell 35 percent in 2010 from 2000, the study showed.

Fishing Decline
The population in Red Harbour has dropped to about 200 from a peak of 350 on the fishing industry’s decline and “the enticement” of high-paying Alberta jobs, including ones with monthly commutes, according to the town’s website.

“Their wives are staying here raising the family, and the men are just coming home for like a week a month,” Deputy Mayor Michelle Rowe said in a telephone interview.

She says her fisherman husband won’t benefit from the new employment-insurance rules that require a one-hour drive to a minimum-wage job.

“That’s eighty dollars he’s going to make, minus the money to pay for a babysitter and extra drive; he’s not going to make much money anyway.”

The rules merely give some clear definition to the existing system, which already requires people to seek out appropriate work while drawing government benefits, said Diane Finley, the federal human-resources minister. The measures are geared to reflect local labor-market conditions and the availability of public transit or child-care costs, she said.

‘Reasonable Distance’
“If there are jobs available for which they are qualified within a reasonable distance, then yes, they should be able to take them because they are still better off” with most positions than they are on government assistance, she said.

Long-distance commuters such as Dave Adams don’t begrudge their countrymen the benefits and say the government is wrong to make changes.

“I don’t agree with what they are doing,” said Adams, a 48-year-old from Newfoundland who does scaffolding work for Canadian Natural Resources Ltd. and has made the Alberta trips since 2007. “I don’t think they should be allowed to touch unemployment.”

At the Toronto layover on a July 19 flight from Fort McMurray to St. John’s, Newfoundland, dozens of men fill the lounge, dressed in jeans, baseball caps from companies such as Suncor and Horizon North Logistics Inc., and summer jackets from Newfoundland sports teams. Few bother to get coffee to keep awake.

Delayed Flight
There is grumbling on the ground as the flight is delayed. Finally onboard, one man falls asleep the moment his row fills up. Over Quebec, Air Canada staff announce that connecting flights to Newfoundland communities such as Deer Lake and Gander probably will be held for 14 of the passengers.

Once at St. John’s, everyone leaves the airport within 30 minutes of landing, several parting with “See you in a week.”

The following morning, Tony Martin waits for a flight to Fort McMurray to a warehouse job in his second rotation out west. The 47-year-old was lured by the chance to double his pay after working 23 years in the province’s public-health system.

“It’s a sacrifice but I’m in an ideal place; I am single and my daughter is 18 years old,” Martin said, adding that other people shouldn’t have to choose between losing jobless benefits and working away from their families.

“What the government has done is very black and white, cut and dry to a problem that isn’t,” he said. “You can’t buy their childhood back.”

On Penney’s flight to see his wife and two kids, he manages to get some sleep, helped by his practice of staying up for 24 hours before he leaves. After he lands, he still faces a two- and-a-half hour drive.

The length of the commute “really gives you five days home” instead of seven, Penney said. “You really can’t get ready for it.”




http://www.bloomberg.com/news/2012-...6-unemployment-from-13-is-new-canada-way.html

 

[badbabysitter]

ROTFLMFAO

Nahanni N.P. (N.W.T.)
Algonquin N.P.
Ahmic
Magnetowan
Ontario
Trois Rivieres
Mt. Tremblant
Saskatchewan
Banff
L'anse aux Meadows
Toronto
Churchill
Chester, N.S.
etc., etc., etc.




http://www.bloomberg.com/news/2012-...6-unemployment-from-13-is-new-canada-way.html



Commuting to 4.6% Unemployment From 13% Is New Canada Way
By Greg Quinn
August 1, 2012

all places at least one time zone away from Alberta... dumbass


and posting it twice doesnt change how mishandling one industry will mean brilliant handling of another

or do you just ignore things that dont suit your arguement

 

[badbabysitter]

three oil spills in Alberta in a month... must be an east coast fishery related issue

Environmental critics are calling for a major review of pipeline safety in Alberta after the province experienced a third large oil spill in a month.



About 230,000 litres of heavy crude oil spilled from a pumping station on an Enbridge Inc. pipeline onto farmland, Alberta’s oil and gas regulator, the Energy Resources Conservation Board (ERCB), said Tuesday.




The regulator said 1,450 barrels of oil spilled from a pumping station on Enbridge’s Athabasca pipeline, 24 kilometres from Elk Point, Alta., a small town roughly 200 kilometres northeast of Edmonton. That pipeline, briefly shut down but then restarted Tuesday, connects the oil sands with Hardisty, Canada’s most important crude oil hub. The spill comes while crews are still working to clean up two other large leaks in Alberta, nearly 800,000 litres of oil from a Pace Oil & Gas Ltd. well about 200 kilometres from the Northwest Territories border, and 160,000 to 480,000 litres from a Plains Midstream Canada pipeline that ruptured beneath the Red Deer River.



Environmental groups are now seizing on the confluence of accidents, which includes another massive spill from a Plains pipe last year, to call for an expansive look at pipeline safety in Alberta.



“Given the significant number of pipeline spills in recent months, Alberta should conduct a review of the integrity of Alberta’s pipeline system,” said Simon Dyer, policy director with Alberta’s the Pembina Institute. “Pipeline spills are inevitable but the risks can be reduced through stronger regulation and practices.”



The ERCB defended the province’s rules. “Alberta has a fairly strong safety record of pipeline safety regardless of the recent incidents,” spokesman Darin Barter said. “I couldn’t speculate on whether the province should or shouldn’t call any sort of review of pipelines because I know our pipelines, at this point, we consider to be adequate.”



In 2010, the province averaged nearly two pipeline failures a day, spilling 9,350 litres. Mr. Barter said Alberta’s record may look ugly compared with other areas because it demands all incidents be reported.



He acknowledged, however, that “there’s also room to improve and we’ll be looking at everything in front of us. But at this point, the ERCB is confident its regulations are protective of public safety.”



Enbridge, in a statement, blamed “a failure of a flange gasket” for the spill and said “there is no risk to public health or safety.”



Pipeline safety is a critical issue for Alberta, as its government mounts a major domestic and international initiative to convince people in British Columbia and the U.S. that a series of new oil sands pipelines – including Keystone XL and Northern Gateway, an Enbridge proposal – can be built without causing environmental damage. That has made the subject of spills a touchy one that officials have sought to play down.



On Tuesday, for example, Alberta’s Ministry of Environment and Sustainable Resource Development said the recent spills are not necessarily cause for alarm, noting they happened in different parts of the province.

 

[trysail]

...noise...

You leap from incorrect assumption to wrong conclusion faster than damn near anyone I've ever seen. End of convo.

 

[badbabysitter]

You leap from incorrect assumption to wrong conclusion faster than damn near anyone I've ever seen. End of convo.

and you are trying to make the inference that oil is the only solution to financial ills...whilst completely disregarding anything that suggests otherwise

 

[Disgustipated]

Two of the dumbest people here schooled the guy who always thinks he's the smartest one in the room. #TooFuckingFunny.

I may just re-post this exchange on Facebook, pintrest and twatter.

 

[trysail]

...noise...

This is fuckin' priceless— from a guy who adds 2 + 2 and always somehow manages to come up with 5.

 

[badbabysitter]

This is fuckin' priceless— from a guy who adds 2 + 2 and always somehow manages to come up with 5.

this coming from a guy that's surpised that Canadians know more about their own country then you do

 

[Disgustipated]

[

This is fuckin' priceless— from a guy who adds 2 + 2 and always somehow manages to come up with 5.

Cite? Link? You're a fucking joke.

 

[trysail]

...noise...

For amusement purposes only.

 

[Disgustipated]

For amusement purposes only.

The best part about being a coward is never having to admit you're wrong. Right?

 

[trysail]

...noise...

You ain't worth it. One-liners and name-calling don't cut it with me. I was told by a wise man that it's foolish to attempt dialogue with certain types. It's advice I took to heart and generally observe. End of convo.

 

[badbabysitter]

You ain't worth it. One-liners and name-calling don't cut it with me. I was told by a wise man that it's foolish to attempt dialogue with certain types. It's advice I took to heart and generally observe. End of convo.

like when someone else shows that you clearly don't know what you're talking about and you respond with " noise"...


but I suppose that's not a one-liner on your planet

 

[Disgustipated]

You ain't worth it. One-liners and name-calling don't cut it with me. I was told by a wise man that it's foolish to attempt dialogue with certain types. It's advice I took to heart and generally observe. End of convo.

You made a false accusation about me and failed to provide a single cite or link. I'm surprised you didn't just link a proven-to-be-wrong climate change graph. This convo ends when I say so, gimmick. I just linked this thread on my facebook account and asked all of my 1,037 friends to check it out and google your user name. Good luck staying private now as most of my friends are hackers and thieves.

 

[chillywilly2]

Two of the dumbest people here schooled the guy who always thinks he's the smartest one in the room. #TooFuckingFunny.

I may just re-post this exchange on Facebook, pintrest and twatter.

And this from ...oh fergetit...you're a dumbass


and no, I don't have a link...jeeez

 

[Disgustipated]

And this from ...oh fergetit...you're a dumbass


and no, I don't have a link...jeeez

Shaddup, you racist piece of shit.

 

[chillywilly2]

Shaddup, you racist piece of shit.

sure, pull the race card every time you look like a dumbass

 

[trysail]

...while the obstructionists whistle Dixie, stick their collective heads in the sand and play politics.


Build the Keystone pipeline.
http://www.bloomberg.com/news/2012-...il-premium-to-24-year-low-energy-markets.html



_________________

Shale Boom Cuts Gulf Oil Premium to 24-Year Low: Energy Markets
By Dan Murtaugh
September 7, 2012

The U.S. shale boom has driven the cost of Gulf Coast light, sweet oil to its lowest level versus Brent crude in almost a quarter century as the nation’s dependence on foreign supplies wanes.

Light Louisiana Sweet, the benchmark grade for the Gulf Coast known as LLS, has traded on the spot market at an average of 15 cents a barrel more than Brent this year, the smallest premium since at least 1988, data compiled by Bloomberg show. The spread’s highest annual average was $4.02 in 2008.

The drop has cut costs for refiners in Texas and Louisiana accounting for 45 percent of U.S. capacity and replaced competing shipments from Africa. Gulf imports of light, sweet crude have fallen 56 percent since 2010, according to U.S. Energy Department data. A shale-oil influx from the Eagle Ford formation in Texas and Bakken in North Dakota and new ways to bring crude to the Gulf, such as this year’s reversal of the Seaway pipeline, may accelerate the shift.

“The market dynamics are changing,” Edward L. Morse, head of commodities research at Citigroup Global Markets in New York, said in a telephone interview. “When the Gulf Coast was a crude importer, they had to attract crude from elsewhere in the world, which meant LLS had to be at a premium to Brent. But now we’re moving into a totally different situation.”

Light Louisiana Sweet, a grade prized because its low- sulfur content and density make it easier to process into fuels such as gasoline, was 92 cents cheaper than Brent yesterday. It averaged 20 cents less than the benchmark in the third quarter.

Brent oil for October settlement rose 40 cents, or 0.4 percent, to $113.49 a barrel yesterday on the London-based ICE Futures Europe exchange. The contract advanced 89 cents, or 0.8 percent, to $114.38 a barrel at 8:42 a.m. in New York.

Energy Independence
U.S. oil output surged to the highest level in 13 years in July, according to weekly Energy Department data. The U.S. met 83 percent of its energy demand from domestic sources in the first five months of this year and is heading for the highest annual level since 1991, department figures compiled by Bloomberg show.

“Unconventional oils and gas are changing everything about our competitiveness in the United States,” Bill Klesse, Valero Energy Corp.’s chief executive officer, said yesterday at the Barclays CEO Energy/Power Conference in New York. “Before you know it, we’re going to have so much light, sweet crude that in the U.S. Gulf Coast we’re not going to be importing light, sweet crude, and we think that happens next year.”

Houston, New Orleans and other ports along the Gulf Coast accepted about 554,000 barrels a day of light, sweet oil from outside the U.S. in June, down from 964,000 barrels a day in June 2011 and about 1.25 million in June 2010, according to the Energy Department’s Energy Information Administration.

African Imports
The West African nations of Nigeria, Angola, Gabon and Equatorial Guinea accounted for 58 percent of the light, sweet crude imported into Gulf Coast ports in June 2012. North African nations accounted for a further 30 percent.

LLS will become about $5 a barrel cheaper than Brent during the next 12 months, David Pursell, a Houston-based managing director for Tudor, Pickering, Holt & Co., said in a telephone interview. The discount would take into account the extra cost of getting LLS to other customers, such as refiners on the East Coast, Pursell said.

Like oil in the Midcontinent, the relationship between LLS and Brent has been upended by surging shale production. West Texas Intermediate oil at Cushing, Oklahoma, the U.S. benchmark grade traded on the New York Mercantile Exchange, shifted to a discount to Brent almost two years ago after trading at a premium for decades.

Midcontinent Glut
Cushing inventories surged to 47.8 million barrels in June, the highest level since Energy Department records for the hub began in 2004. The WTI-Brent spread reached a record $27.88 in October. It was at $18.03 a barrel today.

“Over the last year and a half, with the WTI-Brent spread blowing out, the primary beneficiaries have been the Midcontinent players,” Cory Garcia, a Houston-based oil analyst for Raymond James & Associates, an arm of the financial-services company with almost $40 billion under management, said in a phone interview. “As LLS disconnects next year, the benefits to Gulf Coast refiners will be brought to the forefront.”

Enbridge Inc. and Enterprise Products Partners LP reversed the flow of crude on the Seaway pipeline on May 19. The link, carrying as much as 150,000 barrels a day from Cushing to Gulf Coast refineries, is scheduled to pump as much as 400,000 barrels a day early next year.

Shale Production
About 300,000 barrels a day of Bakken oil is being shipped from North Dakota by rail, Al Monaco, Enbridge Inc.’s president, said in a July 11 presentation in Calgary. Some rail deliveries of Bakken are reaching Texas and Louisiana, Lee Klaskow, a Skillman, New Jersey-based analyst for Bloomberg Industries Research, said.

The Bakken formation, which stretches across parts of North Dakota, Montana and Saskatchewan, and the Eagle Ford formation in south Texas produce the majority of shale oil in the U.S., ahead of formations such as Niobrara in Wyoming and Colorado, Bone Spring in Texas and New Mexico and Monterey in California.

Eagle Ford produced about 283,000 barrels a day this June, up from about 98,000 barrels a day in June 2011 and no barrels in April 2008, according to the Railroad Commission of Texas, the state’s oil and gas regulator.

Getting to Market
“We have all these sweet barrels in the Midwest that need to find a home, and they’re getting to the market by planes, trains and automobiles, you name it,” said Stephen Schork, president of the Schork Group Inc. in Villanova, Pennsylvania. “You compound that with increased production in west Texas and the Eagle Ford, and you have a template for LLS to move to a discount.”

The capacity to transport light, sweet oil to the Gulf Coast from Cushing and inland shale formations will expand to more than 2 million barrels a day by the end of this year and 4.5 million by the end of 2014 from less than 500,000 barrels a day at the end of 2011, Klesse said yesterday.

Valero currently buys about 140,000 barrels of oil a day from Eagle Ford, said Bill Day, a San Antonio-based spokesman for the company. The crude is transported by truck to an unloading dock next to Valero’s Three Rivers, Texas, refinery. About 70,000 barrels a day is fed to that refinery, and the remainder via recently reversed pipelines to plants in Corpus Christi and Houston.

The company brought two foreign oil shipments totaling 547,000 barrels of light, sweet crude to Gulf Coast ports in June, down from 4.88 million barrels in June 2010, data from the Energy Department showed.

Inflection Point
Companies such as Phillips 66 are also rethinking long-term business plans because of cheaper domestic supply.

Phillips 66 Chief Executive Officer Greg Garland said Aug. 1 that the refiner had changed its mind about selling its Alliance plant in Louisiana in part because of forecasts that LLS will shift to a $2- or $3-a-barrel discount to Brent.

“In the interim year that passed since we first made that decision, our view has changed in terms of Gulf Coast crudes, particularly LLS, becoming an advantage,” Garland said on a conference call with analysts and investors.

The shift in the U.S. market could have lasting repercussions on global markets as well.

Weaker Brent
A drop in U.S. imports of light, sweet oil could weaken Brent, Garcia said. Raymond James is forecasting $80 Brent next year, based predominantly on production growth in non-OPEC countries like the U.S., he said.

“People think that U.S. supply growth is sort of disconnected or irrelevant because it can’t export, but it can back out imports and we believe that will have a significant impact on the global oil markets,” Garcia said.

Federal law restricts exports of crude oil without permission from the president. The U.S. exported just 0.7 percent of domestic oil production in June, with none of it leaving from the Gulf Coast, Energy Department data show.

 

[Peregrinator]

You ain't worth it. One-liners and name-calling don't cut it with me. I was told by a wise man that it's foolish to attempt dialogue with certain types. It's advice I took to heart and generally observe. End of convo.

Hi there.

I hope I'm not on that list of "certain types."

I'm curious. You really, honestly, no shit seem to me to value money and profit above anything else in terms of policy. Is that true?

I ask, because I also enjoy your posts about sailing and travel; it's obvious that you also value the beauty of the sea and the landscape. It just seems to me that there's some cognitive dissonance there. Can you help me understand?

 

[trysail]

Hi there.

I hope I'm not on that list of "certain types."

I'm curious. You really, honestly, no shit seem to me to value money and profit above anything else in terms of policy. Is that true?

I ask, because I also enjoy your posts about sailing and travel; it's obvious that you also value the beauty of the sea and the landscape. It just seems to me that there's some cognitive dissonance there. Can you help me understand?

ExxonMobil— alone— has done more to alleviate poverty and human suffering than any other organization I can think of.






Charlie Munger ( the less well-known half of Warren Buffett's Berkshire Hathaway ) has stated:

"I believe Costco does more for civilization than the Rockefeller Foundation,” Munger, 86, told students in a discussion at the University of Michigan on Sept. 14, according to a video posted on the Internet. “I think it’s a better place. You get a bunch of very intelligent people sitting around trying to do good, I immediately get kind of suspicious and squirm in my seat.”
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aOC0M7zl7HBg

Carlos Slim ( a Mexican and the world's richest man, in case you don't know him ) has accurately stated:

“The only way to fight poverty is with employment,” Slim said at a conference in Sydney today. “Trillions of dollars have been given to charity in the last 50 years, and they don’t solve anything.”

Slim’s comments come as Bill Gates and Warren Buffett are in China to persuade fellow billionaires to give at least half their wealth to charity. Buffett, chairman of Berkshire Hathaway Inc., and Microsoft Corp. cofounder Gates have signed up more than 30 philanthropists, including Larry Ellison and Paul Allen, to their Giving Pledge initiative.

“To give 50 percent, 40 percent, that does nothing,” Slim said. “There is a saying that we should leave a better country to our children. But it’s more important to leave better children to our country.”

He’d rather spend money on projects that create jobs than give away his cash as part of a fight against poverty.

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aySvYhqYXOaE

 

[thør]

After the oil pipeline was built, Alaska laborers were often heard to say: "Just give us one more pipeline. I promise I won't piss away the money this time."

 

[trysail]

For every complex human problem, there is a plausible solution— one that is neat, simple and wrong.

-H. L. Mencken​

So..., the world-savers think they are helping to "save the world" with their opposition to construction of the Keystone XL pipeline. In fact, all they're done is ensure that Canadian crude will be transported by rail.

BNSF and Union Pacific thank you.

(see Trysail highlighted sections below)




_________________


http://www.bloomberg.com/news/2012-09-11/brent-wti-oil-gap-sliding-as-north-sea-output-rebounds.html



Brent-WTI Oil Gap Sliding as North Sea Output Rebounds
By Sherry Su
September 12, 2012

The difference between the world’s two most-traded grades of oil is narrowing as North Sea production rebounds from the lowest level in five years.

Brent crude on the ICE Futures Europe exchange in London cost about $18.50 a barrel more than West Texas Intermediate in electronic trading today on the New York Mercantile Exchange. That’s down from $21.92 on Aug. 15, the widest in almost 10 months. Daily exports of the four crude grades comprising the Dated Brent benchmark will rise 24 percent in October, the biggest monthly increase in two years, as offshore maintenance work ends, according to data compiled by Bloomberg.

“It is when we fully exit maintenance in the North Sea that the impact of additional barrels will be felt,” Harry Tchilinguirian, BNP Paribas SA’s head of commodity-markets strategy in London, said in an interview yesterday. “The market tends to look at the difference in price between these two crudes as it tends to guide arbitrage activity across the Atlantic.”

The recovery in North Sea supply is combining with a slew of refinery repairs that are sapping demand for Brent just as new rail links and pipelines are cutting a glut of WTI stored in the U.S. Midwest. Goldman Sachs Group Inc. has stuck this year to a forecast that the difference between the two grades, the most-traded spread on energy exchanges, will shrink to $5 a barrel. BNP says it may drop to between $13 and $14 after staying at $20 until the maintenance period ends.

Loading Programs
Exports of Brent, Forties, Oseberg and Ekofisk crudes, or BFOE, the four grades used to price Dated Brent, will average 890,323 barrels a day in October, according to loading programs obtained by Bloomberg. That compares with 720,000 barrels a day in September, the lowest since Bloomberg began compiling the schedules in 2007. At the same time, more than 1.1 million barrels a day of European refining capacity will be halted for maintenance in October, up from 650,000 barrels this month, according to Vienna-based JBC Energy GmbH.

Brent traded on ICE closed at a record $27.88 a barrel more than WTI on the Nymex on Oct. 14 last year. The average during the past five years is $5.30.

ICE’s Brent-WTI contract is the most popular of those offered by the exchange for any two commodities. Some 28,199 lots changed hands yesterday. Trading spreads allows participants to place wagers without buying the outright futures themselves.

Seaway Pipeline
Loadings of Forties, which typically account for more than 40 percent of total BFOE exports, will rise to 329,032 barrels a day, up from 180,000 barrels a day this month, the lowest level in at least five years, programs obtained by Bloomberg showed.

That will follow the completion of scheduled maintenance at the 200,000 barrel-a-day Buzzard oil field, the biggest contributor to the Forties blend. Nexen Inc. said it halted Buzzard on Sept. 4 for repairs that were anticipated to last until the middle of October.

The logjam of oil in the U.S. is easing after Enbridge Inc. and Enterprise Products Partners LP reversed flows on the Seaway pipeline May 19, carrying supplies from the Midwest to the Gulf Coast refining hub. The link, transporting as much as 150,000 barrels a day from Cushing in Oklahoma, the delivery point for WTI, is scheduled to pump as much as 400,000 barrels a day early next year.

About 300,000 barrels a day of Bakken shale oil is being shipped from North Dakota by rail, Al Monaco, Enbridge’s president, said July 11 in Calgary. Some rail deliveries of Bakken are reaching Texas and Louisiana, according to Lee Klaskow, a Skillman, New Jersey-based analyst for Bloomberg Industries Research.

‘Latest in Surge’
Tesoro Corp. received the first unit-train of Bakken crude Sept. 4 at a new offloading terminal that will allow the company’s Anacortes refinery in Washington state to receive as much as 50,000 barrels a day by rail, Tina Barbee, a company spokeswoman in San Antonio, said by e-mail on Sept. 5.

“This is only the latest in a surge in rail unloading capacity that is likely adding more than 200,000 barrels a day of rail-unloading capacity in the third quarter of 2012,” David Greely, a New York-based analyst at Goldman Sachs, said in an e- mailed report yesterday. There will “shortly be enough rail capacity” for both loading and unloading to move all of North Dakota’s crude production, he said.

Supplies of Canadian crude that can be sent to the U.S. have been hampered by planned maintenance to upgrader units that process heavy bitumen from Alberta’s oil sands deposits into lighter crude. Suncor Energy Inc. started six weeks of repairs at the Fort McMurray upgrader complex earlier this month, while Canadian Natural Resources Ltd. is conducting work at its Alberta plant this quarter.

Four-Month High
Bakken crude prices rose to a four-month high of $103.04 a barrel on Sept. 10, while syncrude, a synthetic oil upgraded from tar-like bitumen in Alberta into refinery-ready crude, jumped to $112.04 a barrel, the highest since July 26, 2011, according to data compiled by Bloomberg. By comparison, WTI for October delivery in New York settled yesterday at $97.17 and traded as high as $97.82 today.

“We expect that Bakken and Canadian crude oil will need to continue to flow to Cushing in the fourth quarter 2012, and WTI prices will need to rise back above Canadian and Bakken prices in order to motivate these flows,” Greely wrote in the report. “At current Bakken prices, this would imply that WTI prices could rise nearly $10 a barrel to $107 a barrel.”

Supertanker Bookings
An unprecedented flow of North Sea oil was shipped to South Korea in the first half of this year after the European Union signed a free-trade accord in July 2011 with the Asian nation. That may resume should Brent prices become cheaper again.

A weaker Brent market will “certainly make Forties more attractive incrementally to South Korea or other Asians,” Seth Kleinman, head of energy research at Citigroup Inc. in London, said by e-mail on Sept. 7.

Eighteen supertankers have shipped North Sea crude to South Korea since December, vessel reports and ship-tracking data from IHS Inc. show. Typically two or three very large crude carriers sail every month from January and July, and since August none has been booked for this voyage. A VLCC carries about 2 million barrels of crude. The FTA exempted the nation’s refiners from a 3 percent import tax on EU products.

The eastbound flow came to a halt because of planned maintenance at Hound Point, the loading terminal for Forties in Scotland, and as the price of the crude advanced. The grade averaged a premium of 26 cents a barrel to Dated Brent in August and was at minus 22 cents yesterday.

“We will start to see some VLCCs to South Korea more than offset an increase of supply in Europe,” Olivier Jakob, managing director of research group Petromatrix GmbH, said on Sept. 7 by phone from Zug, Switzerland.



http://www.bloomberg.com/news/2012-09-11/brent-wti-oil-gap-sliding-as-north-sea-output-rebounds.html