Wildfires Rage On in Western Canada, Shutting More Energy Output
Comment of the Day

May 19 2023

Commentary by Eoin Treacy

Wildfires Rage On in Western Canada, Shutting More Energy Output

This article from Bloomberg may be of interest. Here is a section:

Companies including Chevron Corp., Paramount Resources Ltd. and Crescent Point Energy Corp. also have announced shutdowns, and consultant Rystad Energy estimates that the equivalent of about 240,000 barrels of daily production — and perhaps more than 300,000 barrels — has been shut due to the fires. 

So far, the blazes have mostly struck the gas-producing region of western Alberta. But ConocoPhillips said on Wednesday that it evacuated and then returned non-essential workers to the Surmont oil-sands site because of a wildfire nearby. Surmont produced about 143,000 barrels a day in March. 

Conditions are expected to worsen heading into the weekend, raising the possibility of even more blazes, Christie Tucker, a spokeswoman for Alberta Wildfire, said during a media briefing Wednesday. 

“It will get hotter and drier as we head to the weekend, and as we’ve seen, that can lead to more active wildfire behavior,” she said.

Eoin Treacy's view

The breaking of California’s drought has overshadowed the very dry conditions in much of the centre of the North American continent. This is very early in the season for wildfires to be such a problem in Alberta, and hard winter wheat is withering in states like Kansas.

At present, global wheat, natural gas and oil supply is ample, so these events are not putting upward pressure on prices even if the USA is importing wheat for the first time in years.
The market where supply is most acute presently is in feeder cattle where the slaughter schedule is down 3.3% for cattle and 16.4% for calves year to date. That suggests farmers are regrowing herds and contributing to a supply shortage. The price is accelerating higher to test the 2016 peak.
Cocoa broke upwards to a new seven-year high today on concerns about West African bean quality. 

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