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Canadian Govt To Push for Trans Mountain Pipeline
The Canadian federal government held an emergency meeting to discuss ways to convince Kinder Morgan to continue building the Trans Mountain pipeline extension. Kinder Morgan recently declared a half to spending on the pipeline, which is meant to bring Canadian crude from Alberta to the Washington state market. Opposition to the pipeline has been fierce, and Kinder Morgan is now waiting for proof that approvals will be granted.
Saudi Arabia Signals Ambition for $80 Oil Price
While Saudi Arabian officials tend to shy away from setting public price targets, sources close to the matter say that the Saudis are likely aiming to hit $80/bbl crude prices to make their initial public offering of Aramco more valuable. If that’s the case, then OPEC cuts are likely to continue over the long-haul, and Saudi Arabia may even act unilaterally to ensure prices trend higher, either by increasing geopolitical risk premiums or by cutting off supply.
Short-Term Energy Outlook
The EIA released their monthly Short-Term Energy Outlook yesterday, which predicts that gasoline prices will average $2.74 at the retail level this summer, up 30 cents compared to last year. Gasoline prices, which typically rise relative to crude during March, have seen smaller crack spread gains, thanks to high gasoline supplies in Europe. U.S. diesel consumption in March was above 4 million barrels per day for the second year in a row.
Oil Markets Optimistic US-China Spat May Ease
After Chinese President Xi Jinping’s speech signaling openness to trade, markets have become less worried that the U.S. and China will spiral into a trade war. The Chinese official announced a “new phase of opening up” and rejected the zero-sum mentality currently being espoused by the U.S. government.