On Tuesday, December 3rd, Trans Mountain pipeline expansion project began at Acheson, Alberta. The controversial expansion started two weeks before a federal court of appeal is set to hold hearings on challenges to the project. The expansion would more than double the oil flow from oil-rich Alberta to British Columbia, and potentially from there to export markets in Asia. But British Columbia’s government has been a vocal opponent of the pipeline in bitter disputes with neighboring Alberta. One of those issues being, overall emissions in Alberta rose by 23% between 2005 to 2017 while the emissions per barrel of oil fell by 28% between 2000 and 2017. While there is more oil production than 20 years ago, Alberta’s economy has reliance on the oil industry.
Oil prices edged lower on Tuesday after a key U.S. manufacturing report dimmed the outlook on the manufacturing industry and invoked lingering fears of a global recession.
Oil markets have been trading lower all day today even after yesterday’s sell off on continued fears of a global economic slowdown exasperated by the trade war and unrest in Hong Kong.
Although prices are well off their highs, the complex trades higher today after OPEC+ looks to extend production cuts, the U.S. and Chinese declare a truce on the trade war, and Iran reported having higher levels of uranium than the 2015 signed nuclear deal allows.
It has been a wild Monday for traders after President Trump tweeted yesterday that the United States will increase tariffs on $200 billion of Chinese imports, which, is casting doubt on the likelihood of a successful U.S. and Chinese trade deal.
China and India have had considered on creating a “club” which will negotiate better prices with oil exporting countries and will be looking to import more U.S. crude oil in order to reduce OPEC’s sway. Two of the world’s largest oil importers, second and third respectfully, have exchanged senior level visits several times to discuss the premiums placed on oil sold to Asian nations. India, which imports more than 80% of its oil requirements, has seen oil prices increase to more than $75 a barrel.
Oil prices are taking a breather today after Wednesday’s strong rally due in large part to the gasoline inventory draw and low production levels in Venezuela.
Nigerian President Muhammadu Buhari, the 76 year old former military ruler, has been re-elected. Constant threats to the flow of crude from armed groups and thieves, Buhari has plans to develop a backbone of stable power, roads and rail lines for agricultural expansion and industrialization in Africa’s most populous nation. Providing two-thirds of government revenue for Nigeria, the President needs all the money he can get from oil. “Oil revenue is still what dictates government spending and they will need to keep production going,” said Jubril Kareem, a Lagos-based analyst at Ecobank Energy Research.
WTI oil prices rose Monday morning to $56.94/barrel due to a barrage of bullish headlines which puts this year’s oil rally north of 22% and climbing.