Saturday, November 25, 2017

What is going on in the oil and gas market? Sorry I digressed


Well the oil and gas industry’s recovery, started at the lows of 2015, has now solidified.  Having next year oil prices hit $60 or even $70 is a realistic expectation. The big question is will Canada’s oil and gas industry participate or has it been so badly damaged by today’s political climate that it is losing out? Even Rachel Notley recognizes the problems for her treasury and her re-election and has begun a highly publicized tour to promote new pipelines, in particular the Trans mountain pipeline. 


In the meantime, LNG is dead thanks to the B.C. government and the Lower Fraser Delta area with as epicenter Vancouver.  NE BC probably is ready to shoot the West Coast fuzzballs and the Mayor of Burnaby is in that part of the woods probable high on the unwanted list. Vancouver is deluded and drowns in the mirage of its real estate driven economy. Of course, the liberals in the east are feigning Alberta sympathy and hope that between B.C. and the highly politicized NEB they can wash their hands in innocence while concocting another way to raise taxes (to be paid by the middle class).
In the meantime, a new boom is bypassing Alberta because regulator demands shut down pipelines in the Montney area which effectively destroys stock market value for otherwise very good operators such as Birch Cliff, Peyto and even Canadian Natural Resources who now has bypassed in size the blundering managements of Encana and Cenovus. Isn’t it amazing that after years of underperformance at the old Petro-Canada, now combined with heavy oil sands producer Suncor, the latter is now another stock market darling with the mal-influence of Trudeau Sr finally hidden in the deepest and out of sight recesses of PetroCan’s dark history.

Boy, read all this inflammatory lingo and you’d think your reading a ‘far Right’ blog. I can tell you that this is not a far-right blog. It is a blog that distrusts government intervention in the daily life of its citizen. It is distrustful of the leftists’ elites at our universities that try to muzzle free speech of its students and its staff. That based on ideology decides who may and who may not address its students – our children for whose education we have saved for many years and who are now brainwashed in, as George Orwell would call: ‘Newspeak’. Really, I have seldom seen free speech and expression of opinion so severely suppressed in Canada in the 40plus years that I am proud to count it as my home.
I think there is a place for government and there is definitely a place for caring about the environment;  and protecting the environment. Us humans definitely affect our environment (just fly across the prairies and see how much land has been touched by us humans). But to blame that all on CO2 and Climate change is in my books outrageous but thinking we can direct our climate with carbon taxes and credits is plain hubris. Just like it is outrageous that, so many tech companies can monitor what is going on in my living room. That government knows enough about my financial situation that it can nearly do my tax return better than my accountant! That this government legislates that schools withhold information about my children from me their parent (Apparently in leftist cycles parents are predators who only want to torture and dominate their offspring – how ludicrous).

That same government prescribes even the flush tanks in my bathroom and the types of doorknobs I am allowed to use in my new-build house. Yes, government is not necessarily evil, and it provides many good things, but politicians (left and right) are inherently geared to building their power and in that they are all, in my simplistic view, to be distrusted. If we, the people, are truly in charge, we should be reining in their power.  The outcry of the proposed business taxes by the liberals was heartening. We need a lot more of that; government has to learn where they are wanted and where not. We are a population of thinking and self-accountable people. When we’re lazy though, especially if things go reasonably well, we let government take care of us from cradle to grave. Thank the government that makes sure we don’t have to think!  They do all that in return for power and for us giving up our individual freedom.

I don’t say that gays or lesbians or transgenders are evil or subhuman. It really is their life not mine. Science lately shows more and more that those dispositions maybe hormonal related – their own hormonal balance and/or that of their parents at birth. Some very successful people are homosexual. So what?  It is their life not mine. If you come to think of it, being black, yellow, or whatever, is probably also a matter of chemistry. So is being man or female.  I my books, it is not about being different. Being different is good and it makes life interesting. But we should all be having the same human rights; the right of being treated fairly and decently independent of color or chemistry.

I think that if I was working in the movie industry, and we know all the stereotypes. I would be severely disappointed as well. It seems Weinstein is straight of that stereotype book, I would feel assaulted as well as many women and likely men too were and probably still are sexually, and in other ways, victimized.  It is not about these injustices and violations that those people have experienced that I rail. It is how this, the climate of fear, the fears of the unknown and the fears of change that today’s politicians and media elites are using to control us; to tell us how to live and how they manipulate us. That is what I am so angry about and especially because we as citizen seem to fall for these tactics.
Don’t trust government, don’t trust politicians no matter how benign their beginnings, and don’t trust either our economic leaders – CEOs, and other Sr Management types. None of these people are here for you; they are for themselves and screw you! That is why I am proud to call myself a libertarian Canadian investor.  And yes, I think Canadians are these days so deluded that they have become self-destructive.  That is why one of our key industries energy, and more general, resources is in trouble. Canada wake up – see how you are manipulated by the power-hungry, who only care about staying In power as long as they can and don’t think beyond the near future.
Oh, was this about the oil and gas recovery?   I guess I digressed… maybe not. Well, here is a chart of WTI (taken from the Globe and Mail) and no matter how you look at it, slow or fast, oil (and gas) are on the way up. I don’t want to scare you, but it looks to me, no matter the current Canadian political environment, oil and gas companies are poised to recover, and this may be one of the last opportunities to buy on the cheap. But just in case Canada falls by the wayside, also buy some international oil: Exxon-Mobil; Shell or some smaller U.S. companies EOG?
My take on technical analysis of oil prices. BTW the supply-demand issue has improved quite a lot as well. Purple dashed lines is slow upward moving price channel; Green lines indicate a faster upward moving channel interrupted and resumed by the red (fastest) upward moving channel. All 'ways go to Rome' or higher oil prices.

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