As Fort McMurray Cools, So Does the Market

By: Daniel Guttman / May 9, 2016

The market has fallen off significantly after an early morning rally. WTI is down $1.25 to $43.41 and both RBOB and HO are down $.0526 and $.0507 respectively. Even though the Canadian wildfires have dampened the country’s output by about 1 million barrels a day, it seems as if the strengthening U.S. dollar, caution among investors, and a new Saudi Arabian oil minister are having more of an impact on the market.

Thankfully, the wildfires which have ravaged areas of northern Alberta for a week now were not as powerful over the weekend as originally expected. Still, more than 85,000 residents have had to evacuate and upwards of 1 million bpd of Canada’s crude production, of which almost 100% is exported into the U.S., has suffered. This historic blaze has had such an impact on the oil-sands producers that Suncor Energy Inc., Phillips 66, and Statoil ASA have declared force majeure on their supply to their customers. According to Bloomberg, force majeure is “a provision protecting companies from liability for contracts that go unfulfilled for reasons beyond their control.” In better news, however, current weather forecasts see the fire moving east, away from oil-sands operations, and Morgan Stanley believes production can be back up and running fully in a week.


Before and after satellite image of the Fort McMurray International Airport and surrounding areas.

  • The new Saudi Arabian oil minister, Khalid Al-Falih, has the notion of market share on his mind rather than price and pledges to keep the country’s output at record levels.
  • China’s daily imports of crude oil were up 3.2% in the month of April.
  • According to Baker Hughes, U.S. oil rigs fell by 4 last week to 328 and combined oil and gas rigs fell by 5 to 415, which breaks a record-low that has stood since 1947.
  • The U.S. dollar index continues its rally from last week and is $0.21 higher this morning at $94.12.


Categories: Daily Market Update

Daniel Guttman

Written by

Daniel Guttman

With a background in wholesale and commercial sales as well as pipeline scheduling, Daniel is currently the Manager, Business Development in the Card Access Fuels department. He is tasked to find new and innovative solutions to increase sales opportunities for the sales team while managing and evaluating internal department processes. He assists with day to day personnel management, customer data analysis, as well as the daily Pacific Pride inventory and pricing direction.

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