disbelief still in oil inventory rise---Oil +6.47 M versus +3M estimate
---Distillate +1.57M versus -500K
---Gasoline +3.87M versus +1.5M
Today............
---veritas research analyst (on BNN) says US shale production growth misplaced
---+ 20% capex spending resulting in flat or declining growth
---lower 48 states production down Y/Y 300,000 barrels...where's the growth?
---money spent is just to offset the declines otherwise it would be worse
---no support for external financing. No high yield financing mkt.
---have to live within cashflows. Need $60.+ to get financing.
---oil may stay in $50. to 55. range
---OPEC cuts are for 6 months only; so this summer OPEC is expected to start producing & down goes oil again.
---tax issues will have unintended consequences of higher prices for WTI & outweigh regulatory impact.
---overall good for Cdn. producers with narrowing of the differential, rising WTI, lower CDN$
---all the above not appreciated by Cdn. investors
---AND yet CPG languishes!!!
carlos