Alberta oil producers are making a killing in oil and gas, thanks to heightening global tensions.After falling off in recent weeks, oil prices are once again on an inexorable march higher amid threats of a broader war in the Middle East.Prices have gained almost 10% since Israel assassinated a pair of Hamas and Hezbollah leaders in Tehran and Beirut, respectively.After reaching as high as USD$79.75 on Wednesday prices were down about $1.50 on Thursday in anticipation of the July contract expiry..But analysts expect prices to gradually creep higher on tightening supply as well as geopolitical tensions.That’s because Iran, which has vowed to retaliate for the Israeli attacks, is an OPEC member and the fifth largest oil producer in the world behind Canada.Through its proxies, Iran controls the Houthis which have stepped up attacks on Western shipping including oil tankers. Iran also controls access through the Straits of Hormuz which sees about 20 million barrels per day — or 30% — of the world’s oil trade passes through a choke point barely 40 kilometres wide.About 70% of that total is destined for Asia.In the event of all-out hostilities, it is expected the Iranian navy would move to bring the global oil market to its knees.“Oil markets are justifiably worried that the assassination of Haniyeh will bring Iran more directly into the war with Israel. And that could put at risk Iran’s oil supply and related infrastructure,” analyst Vivek Dhar at Commonwealth Bank of Australia, said in a client note.“With limited spare pipeline capacity to bypass such a blockade, the Strait of Hormuz looms as a major potential disruption risk for oil markets.”.Also propping prices was a set of data releases from the US along with a weaker dollar.Lower 48 stockpiles fell by 3.4 million barrels in the week ended July 26 to 433 million barrels, according to the Energy Information Administration (EIA).Meanwhile, the US dollar extended losses on Thursday after the Federal Reserve held interest rates but left the door open for a cut in September. A weaker dollar has the effect of boosting oil demand from buyers in other currencies.More important for Alberta, Western Canadian Select prices were up about $1.49 even as West Texas Intermediate and European Brent fell. At close of day on Wednesday, it was sitting at $58.80 per barrel.On Thursday, Cenovus credited the Trans Mountain pipeline expansion for helping to lower those discounts by about $6 per barrel — or more than 20% — in the second quarter of the year, since the expansion came on..It has since widened due to refinery outages in the Lower 48 but the longer term trend is clear.“We have seen TMX have the impact we were looking for,” Geoff Murray, the company’s executive vice-president, said on an earnings conference call on Thursday. “We have been provided a relatively exciting access to the globe and that’s had its impact back into Alberta.”Likewise, CNRL president Scott Stauth called the pipeline a “significant achievement” for all Canadians while providing benefits for both taxpayers and producers.Trans Mountain added “much-needed egress capacity and increasing exposure to global market pricing for crude oil products,” he said in a statement on his companies second quarter results.Last week Calgary-based MEG Energy credited Trans Mountain for a $136 million Q2 profit.“Differentials will remain narrow for years while Canadian egress remains unconstrained,” vice-president of marketing Erik Alson said on a conference call..This is what the Western Standard is up againstThe Trudeau government is funding lies and propaganda by directly subsidizing the mainstream media. They do this to entrench the powerful Eastern, woke and corrupt interests that dominate the political, social and economic institutions in Canada. Federal authorities are constantly trying to censor us and stop us from publishing the stories that they don’t want you to read. Ottawa may weaponize our taxes and police against us, but we’ve got a powerful ally on our side.You. Free men, and free women. We need you to stand with us and become a member of the Western Standard. Here’s what you will get for your membership:Unlimited access to all articles from the Western Standard, Alberta Report, West Coast Standard, and Saskatchewan Standard, with no paywall. Our daily newsletter delivered to your inbox. .Access to exclusive Member-only WS events.Keep the West’s leading independent media voice strong and free.If you can, please support us with a monthly or annual membership. It takes just a moment to set up, and you will be making a big impact on keeping one the last independent media outlets in Canada free from Ottawa’s corrupting influence.
Alberta oil producers are making a killing in oil and gas, thanks to heightening global tensions.After falling off in recent weeks, oil prices are once again on an inexorable march higher amid threats of a broader war in the Middle East.Prices have gained almost 10% since Israel assassinated a pair of Hamas and Hezbollah leaders in Tehran and Beirut, respectively.After reaching as high as USD$79.75 on Wednesday prices were down about $1.50 on Thursday in anticipation of the July contract expiry..But analysts expect prices to gradually creep higher on tightening supply as well as geopolitical tensions.That’s because Iran, which has vowed to retaliate for the Israeli attacks, is an OPEC member and the fifth largest oil producer in the world behind Canada.Through its proxies, Iran controls the Houthis which have stepped up attacks on Western shipping including oil tankers. Iran also controls access through the Straits of Hormuz which sees about 20 million barrels per day — or 30% — of the world’s oil trade passes through a choke point barely 40 kilometres wide.About 70% of that total is destined for Asia.In the event of all-out hostilities, it is expected the Iranian navy would move to bring the global oil market to its knees.“Oil markets are justifiably worried that the assassination of Haniyeh will bring Iran more directly into the war with Israel. And that could put at risk Iran’s oil supply and related infrastructure,” analyst Vivek Dhar at Commonwealth Bank of Australia, said in a client note.“With limited spare pipeline capacity to bypass such a blockade, the Strait of Hormuz looms as a major potential disruption risk for oil markets.”.Also propping prices was a set of data releases from the US along with a weaker dollar.Lower 48 stockpiles fell by 3.4 million barrels in the week ended July 26 to 433 million barrels, according to the Energy Information Administration (EIA).Meanwhile, the US dollar extended losses on Thursday after the Federal Reserve held interest rates but left the door open for a cut in September. A weaker dollar has the effect of boosting oil demand from buyers in other currencies.More important for Alberta, Western Canadian Select prices were up about $1.49 even as West Texas Intermediate and European Brent fell. At close of day on Wednesday, it was sitting at $58.80 per barrel.On Thursday, Cenovus credited the Trans Mountain pipeline expansion for helping to lower those discounts by about $6 per barrel — or more than 20% — in the second quarter of the year, since the expansion came on..It has since widened due to refinery outages in the Lower 48 but the longer term trend is clear.“We have seen TMX have the impact we were looking for,” Geoff Murray, the company’s executive vice-president, said on an earnings conference call on Thursday. “We have been provided a relatively exciting access to the globe and that’s had its impact back into Alberta.”Likewise, CNRL president Scott Stauth called the pipeline a “significant achievement” for all Canadians while providing benefits for both taxpayers and producers.Trans Mountain added “much-needed egress capacity and increasing exposure to global market pricing for crude oil products,” he said in a statement on his companies second quarter results.Last week Calgary-based MEG Energy credited Trans Mountain for a $136 million Q2 profit.“Differentials will remain narrow for years while Canadian egress remains unconstrained,” vice-president of marketing Erik Alson said on a conference call..This is what the Western Standard is up againstThe Trudeau government is funding lies and propaganda by directly subsidizing the mainstream media. They do this to entrench the powerful Eastern, woke and corrupt interests that dominate the political, social and economic institutions in Canada. Federal authorities are constantly trying to censor us and stop us from publishing the stories that they don’t want you to read. Ottawa may weaponize our taxes and police against us, but we’ve got a powerful ally on our side.You. Free men, and free women. We need you to stand with us and become a member of the Western Standard. Here’s what you will get for your membership:Unlimited access to all articles from the Western Standard, Alberta Report, West Coast Standard, and Saskatchewan Standard, with no paywall. Our daily newsletter delivered to your inbox. .Access to exclusive Member-only WS events.Keep the West’s leading independent media voice strong and free.If you can, please support us with a monthly or annual membership. It takes just a moment to set up, and you will be making a big impact on keeping one the last independent media outlets in Canada free from Ottawa’s corrupting influence.