Western Cdn Select Oil Plunge

[errolanderson]

Our Western Cdn Select oil price has plunged 20% of-late from $52 per barrel to $41.50 per barrel today. The spread with WTI has also quickly widened from $20 to $25 per barrel during this fallout.

Some analysts stateside suggest WTI crude could ease toward $55 per barrel once again given the rise in global oil supplies. This situation could push Cdn crude toward below $30 per barrel once again. Cdn production breakevens are rumored around $40 to $45 per barrel . . . bumps in the oil industry again.

[biglentil]

Our Western Cdn Select oil price has plunged 20% of-late from $52 per barrel to $41.50 per barrel today. The spread with WTI has also quickly widened from $20 to $25 per barrel during this fallout.

Some analysts stateside suggest WTI crude could ease toward $55 per barrel once again given the rise in global oil supplies. This situation could push Cdn crude toward below $30 per barrel once again. Cdn production breakevens are rumored around $40 to $45 per barrel . . . bumps in the oil industry again.

Yet gas is $1.20 at the pumps.

[bucket]

Luckily we have high gas prices to pad the margins of the oil industry. ...can't have the shareholders losing money ...just the consumers who are paying 30 percent more than they should be.

Sort of like the Westons with their price fixing of bread ....no one will notice. ..

[the big wheel]

time for an investigation into price fixing at the pumps.

and on a related note those prices at the pumps mean our governments are reaping revenue typical of 100 oil. And yet we can't pay our budget????
Totally mismanaged.

[ajl]

Believe me, shareholders have lost money in the Canuckistanian oil patch. Worst investment ever. Lucky thing the US market was offsetting those loses. Yes the integrated oils are getting margins padded a little at the pumps. Just goes to show that despite unprecedented levels of stimulus at every level, the economy of Canuckistan is deader than dead. The B of C cant raise rates as seen yesterday even if it needs to. If rates do not raise we have stagflation, (the current path) and if they do we have default. Screwed either way.

[the big wheel]

Inflation they are talking about
Is a result of these fake fuel prices at the pump raising everyone's cost to make a living the boc wants to fix that by raising interest rates?? Surprise surprise that will not reduce prices at pumps so we ll
Be hit by both ends high cost of goods and interest rates.
Fix the problem of gouging at the pumps first.

[Guest]

Our Western Cdn Select oil price has plunged 20% of-late from $52 per barrel to $41.50 per barrel today. The spread with WTI has also quickly widened from $20 to $25 per barrel during this fallout.

Some analysts stateside suggest WTI crude could ease toward $55 per barrel once again given the rise in global oil supplies. This situation could push Cdn crude toward below $30 per barrel once again. Cdn production breakevens are rumored around $40 to $45 per barrel . . . bumps in the oil industry again.

so that means gas and diesel prices will go up some more , what a totally f#$ked up market, gouging bunch of bastards

[Guest]

time for an investigation into price fixing at the pumps.

and on a related note those prices at the pumps mean our governments are reaping revenue typical of 100 oil. And yet we can't pay our budget????
Totally mismanaged.

these govt (all of them) want high prices . they get paid on a % , remember . the higher the price , the higher the tax , useless pricks won't be investigating SFA

[errolanderson]

Business spending in Canada on capital projects has plunged by more than 50% slowing to 3.5% from 9.7%.

Group . . . Canadian economy heading into a train-wreck and the Bank of Canada is planning a July rate hike announced yesterday.

Feeling very grumpy today with our leaders . . . .

[Agvocate]

Feeling very grumpy today with our leaders . . . .

I try to steer clear of the politics on here but read a good quote; Canada might be able to survive Justin Treadeau but I doubt they can survive a populous stupid enough to vote for him.....

It's a tail spin right now. Kostal had a good article on the Canadian dollar today as well. How government policy is driving investment away from Canada, specifically the oil sector. Trade deficit is growing. Pretty bearish the CAD.

[ajl]

It does not seem that anybody understands what drives interest rates. Government never willingly raises rates, they always try to suppress them. Interest rates go up for 2 reasons: the first is in response to inflation. Canuckistan is in stagflation now just like the late 1970's. Inflation was close to 10% in 1981 and rates had to rise to prevent hyperinflation. Inflation, while not yet that high is on the rise today. The other thing that is driving up rates is demand for credit is way up. As people and governments need to refinance, the new loan is bigger than the old loan since there is denial that the borrower is broke. Happened in the early 1980's and again today. Another factor driving rates is the risk profile of the borrowers is shifting to more risk so the risk premium goes up as it did in the 1980's. Bottom line is rates have to rise regardless of the state of the economy like they did in 1980. All that blather about improving economic fundamentals is just BS. Does Poloz believe his own BS, I don't know.

[the big wheel]

It does not seem that anybody understands what drives interest rates. Government never willingly raises rates, they always try to suppress them. Interest rates go up for 2 reasons: the first is in response to inflation. Canuckistan is in stagflation now just like the late 1970's. Inflation was close to 10% in 1981 and rates had to rise to prevent hyperinflation. Inflation, while not yet that high is on the rise today. The other thing that is driving up rates is demand for credit is way up. As people and governments need to refinance, the new loan is bigger than the old loan since there is denial that the borrower is broke. Happened in the early 1980's and again today. Another factor driving rates is the risk profile of the borrowers is shifting to more risk so the risk premium goes up as it did in the 1980's. Bottom line is rates have to rise regardless of the state of the economy like they did in 1980. All that blather about improving economic fundamentals is just BS. Does Poloz believe his own BS, I don't know.

And what many don't understand also is that to counter the higher risk of people s situation adding higher cost to
Their situation is what does most in. That's what interest rates did in the past and will do again. It's s a money grab for
Lenders.
The real issue to deal with is not to
Let out credit so easy. The rate is not the problem and not the solution to raise it.

It will destroy us faster than anything else by raising it.

[farmaholic]

I doubt lenders want to be on the wrong side of an asset value curve of farmland, housing, commercial realestate, vehicles, luxury items(...not evaporated consumer debt where there is nothing to repossess...thats even worse) if there is a huge default on loans because of repeated interest rate hikes and a correction to the asset's value.

Will the current situation only "not end well"?

[ajl]

And what many don't understand also is that to counter the higher risk of people s situation adding higher cost to
Their situation is what does most in. That's what interest rates did in the past and will do again. It's s a money grab for
Lenders.
The real issue to deal with is not to
Let out credit so easy. The rate is not the problem and not the solution to raise it.

It will destroy us faster than anything else by raising it.

Rates are the signal to not take on more debt. Too much debt is the problem today. Mind you this is a theoretical discussion as the damage from rate suppression is already done. There is no way out from here and the ship will sink.

[bucket]

Even buying good used equipment to reduce or eliminate debt can be burdensome. ..repairs....or downtime....


Replacing equipment is a necessary evil....guys can chug along just fine. ...but for more perspective ....fuel prices were less 30 years ago with less chemical and fertilizer.....and grain prices have not adjusted accordingly. ....

Raising rates won't be good but primary production revenues haven't kept pace .....the survivors will be those with generations of money ....or well protected SM .....


Look at the young farmers nominees. ...generation farms or protected....