NEW YORK/CALGARY — North American energy traders are reluctant to take up long-term positions on Canadian crude price moves, preferring to stick to spot deals, as uncertainty around government intervention in the market grows following delays to a critical pipeline project.
While some producers welcomed the government cuts, others including Suncor Energy and Imperial Oil criticized the move for causing uncertainty and unintended consequences, such as disrupting rail shipments of crude.Now, Enbridge’s delay has heightened concerns the government may impose cuts for longer than its current target of year-end.
BROKEN TRUSTNot being able to lock in forward prices typically heightens risk for producers and refiners, leaving them more exposed to fluctuating spot commodity prices. “I won’t take any forward positions in Canada right now. Everyone is wondering what the government is going to do … one announcement can ruin your year,” one trader said.
Further muddying the picture, current Alberta Premier Rachel Notley’s New Democratic Party government is currently trailing in the polls ahead of a spring election, facing a stiff challenge from the United Conservative Party.Alberta government spokesman Mike McKinnon said the cuts had been applied fairly and equitably.
Trudeau has brought Canada’s economy to a grinding halt and the worst is yet to come...
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