Demonstrations begin Monday at locations across Canada, and are planned to continue until tax is rescinded

Published Apr 01, 2024  •  Last updated 50 minutes ago  •  5 minute read

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Dozens of people gathered on the Trans-Canada Highway at Highway 22 west of Calgary as part of a nationwide protest against the federal carbon tax, which increased Monday.

Protesters called for the tax — levied on individuals, families, small and medium-sized businesses, First Nations and public institutions such as cities and schools — to be abolished.

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The demonstration was one of several across the country Monday, with plans to continue them until the tax is rescinded, organizers said.

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Shaun Derman was one of many who stood at the side of the highway, holding a sign that read, “Axe the tax.”

“It’s a nationwide carbon tax protest, but they’re going to have to have petitions and everything to try and stop the carbon tax,” he said.

“I come out for the protests because I believe there should be a Western Canada now — stop the carbon tax, stop the transfer payments to the east, stop it all.”

The federal carbon tax and its associated rebates rose Monday from $65 per tonne of carbon emissions to $80.

Gas, diesel, propane and natural gas prices will increase — some by cents, and in other industries by as much as nearly $2.

Derman criticized the tax for causing an increase in the cost of gas, groceries and other consumer goods.

“I’d like to have more people aware of it so that more people will get involved,” he said.

Several RCMP vehicles were parked nearby, and police advised motorists of potential delays on Highway 1.

“If you have travel plans in this area during this time, consider alternate routes,” Mounties said in a written statement issued Monday morning. “Alberta RCMP and partner organizations will be present to ensure that the impact on travellers will be minimized and to ensure traffic disruption will not affect public safety.”

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Members of the Calgary Police Service’s public safety unit were on hand to assist — “a normal practice in these types of events,” according to the service.

The protest maintains a non-partisan stance, organizers said in a statement issued Sunday, aiming to show the variety of Canadians that disapprove of the carbon tax.

Protesters speak out against carbon tax

One protester who drove from B.C. and wished to remain anonymous called the carbon tax “atrocious”, saying it affects everybody.

Pointing to the Petro-Canada gas station at the Highway 22-TransCanada interchange nearby, the protester said she noticed a 30 cent increase at the pump from Sunday night to Monday morning.

“I’ve talked to people today who cannot afford fuel to go to work . . . how can they make the money to live?” she said.

The increase in the federal carbon tax comes at a time when Canadian members of Parliament will get their customary pay raise on April 1, resulting in increases of anywhere between $8,500 and $17,000 this year.

“Did you know Justin Trudeau and his cabinet got raises today? On the very day that he decides to empty Canadians’ bank accounts a little bit more. That’s why we’re here.

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“There are more people in this country that are not fine, and it’s getting worse.”

Some provinces have called on Ottawa to cancel the hike because of the affordability crisis. Prime Minister Justin Trudeau has said the increase also means larger quarterly rebate cheques.

Trudeau has accused conservative premiers of lying about the policy’s effect on inflation and has challenged his provincial critics to present alternative plans to reduce emissions.

Protester Judy Martens said people are running out of options, and the demonstration is one way everyone can come together to oppose the carbon tax.

“Seeing what’s happening to Canada, seeing how everybody’s starting to suffer more and more . . . my hometown never had a tent city; now there’s a giant tent city,” she said.

Alberta gas tax increase goes into effect

Alberta was hit with another hike Monday as the provincial government fully reinstated its fuel tax, meaning an increase of four cents per litre. The 13-cents-per-litre tax was suspended for all of 2023 and partially reinstated in January 2024.

Gary Lambert of Innisfail, a military veteran, said he’s upset about both federal and provincial tax hikes.

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“People gotta realize it’s not just the one tax,” he said.

Allan Hunter of Airdrie said he was also troubled by the double whammy.

“The Alberta gas tax increase is a bit hypocritical of the (United Conservative Party government), but the carbon tax isn’t just about the carbon going in your tank,” said Hunter.

“Everything you purchase, every one of these trucks going by, every one of these cars going by, everything we consume in this country is going up today.

“Thanks Justin, you just made things even less affordable for Canadians.”

Carbon tax protesters on Parliament Hill, across the country

Elsewhere in Canada, dozens of people gathered on Parliament Hill, some waving “axe the tax” signs while others draped themselves in Canadian flags or expletive-laced messages about the prime minister.

Protesters also temporarily blocked part of the Trans-Canada Highway linking Nova Scotia and New Brunswick, Manitoba and Saskatchewan, and Saskatchewan and Alberta.

TV reports showed demonstrators near Aulac, N.B., carrying signs that read “Axe the tax” and “Trudeau must go.”

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One eastbound lane was open for commercial vehicles only, and one westbound lane had reopened to all traffic, but motorists travelling between the two provinces were advised to expect delays, said New Brunswick RCMP.

In British Columbia, BC United Opposition Leader Kevin Falcon joined about 70 protesters in Richmond.

Falcon said the 23 per cent increase in the levy is a “cruel April Fool’s joke” on B.C. residents, especially those who pay the highest gas taxes in the country.

John Rustad, the leader of the Conservative Party of BC, also attended the rally. He said by 2030 the average family of four will have paid close to $27,000 in the carbon fees.

Monday’s carbon tax increase will be noticed most with the price of gasoline and diesel. Clothing and food costs may be indirectly affected, but the effect of the increase has yet to be determined.

Drivers in the Calgary region experienced an increase in fuel prices last week, ahead of the carbon tax hike and a simultaneous increase in the provincial gas tax.

Trudeau points to rebate cheques

Trudeau and other carbon pricing proponents say critics are ignoring the fact that Canadian families receive quarterly rebate cheques, which are more generous to low-income households, to help them offset the upfront costs.

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The federal government increased the quarterly carbon rebate amounts to keep up with the cost increase. Albertans will be getting $225 for a single person, $337.50 for a couple and $450 for a family of four. Rural residents are to receive 20 per cent more.

The next rebate is due April 15.

Carbon tax supporters point to the costs climate change has imposed on Canadians through disasters such as wildfires and floods.

Last week, some 200 economists and academics from universities across the country released an open letter defending carbon pricing as the most low-cost way to reduce emissions, as opposed to imposing stricter regulations.

— With files from Mackenzie Rhode and The Canadian Press

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What is the price of platinum today?

The price of platinum opened at $905.88 per ounce, as of 9 a.m. That’s down 0.01% from the previous day and down 8.29% from the beginning of the year.

The lowest trading price within the last day: $903.10 per ounce. The highest platinum spot price in the last 24 hours: $917.00 per ounce.

Platinum spot price

Platinum price chart

The chart below shows how the spot price of platinum is trending over the year.

Year to date, platinum is down 8.29%, as of 9 a.m. The 52-week high reached $1,135.49 on April 21, 2023, and the 52-week low dropped to $843.15 on Nov. 10, 2023.

The precious, silvery-colored metal is priced in U.S. dollars. This means that the fluctuations in the value of the U.S. dollar can impact its price.

The price of XPT/USD reflects the value of one ounce of platinum in U.S. dollars, and it is traded like traditional currency pairs. Because platinum trades occur globally, investors can also track the spot price of platinum in other currencies, such as XPT/EUR for euros and XPT/GBP for British pounds.

Factors that can influence the price of platinum include changes in demand, geopolitical events and tensions in major platinum-producing countries. Of course, investor opinion and speculation can also affect prices.

Precious metals spot prices

Platinum is one of four main precious metals investors can trade via physical bullion, exchange-traded products or futures contracts. Gold, silver and palladium spot prices are also updated 24/7 in various currencies.

Platinum vs. gold price

Currently, platinum trades at $905.88 per ounce, as of 9 a.m., compared to gold, which trades at $2,252.65 per ounce. Year to date, platinum prices are down by 8.29% and gold prices are up by 9.02%.

“Historically, platinum has often been more expensive than gold due to its relative scarcity and unique properties. However, the price of platinum can fluctuate in response to changing market conditions,” said John Bergquist, president of Elysium Financial.

Political instability and supply disruptions in major platinum-producing regions like South Africa and Russia affect prices.

The silvery metal also tends to be a less reliable store of value than gold.

While historically, platinum has been pricier than gold, that flip-flopped briefly in August 2011. When looking at the gold-to-platinum price ratio, platinum was priced above gold from January 2013 until December 2014. Since then, gold has more than doubled its value compared to platinum prices.

Platinum price history

Like any metal, the price of platinum can be volatile. Various factors affect it, the most significant being supply and demand dynamics. Other factors, such as economic conditions, geopolitical events, and changes in industrial and investment demand, can also impact the price of platinum.

At the start of the new millennium, the precious metal’s spot price was around $420. Fast-forward over 20 years, and the current price of platinum has more than doubled.

The spot price soared to new heights, trading in February 2008 at around $2,200 per troy ounce. In November of that year, the price returned to less than $1,000.

Platinum’s spot price has fluctuated between around $800 to $1,400 for the past decade, hovering around the $1,000 threshold on average.

Platinum prices today remain historically low. Prices dropped as low as $623.50 in March 2020 during the COVID-19 pandemic. While prices have recovered, platinum is nowhere near its all-time high of $2,213.20, set on March 3, 2008.

Platinum futures

Futures contracts let investors speculate on the future price movements of an underlying asset like platinum.

These financial contracts represent an agreement between two parties to trade a set amount of platinum at a specified price at a future date. They can be settled by exchanging the physical commodity or cash in place of the commodity.

Futures contracts differ from spot prices in that futures contracts establish a future price whereas spot prices are for immediate delivery. These contracts can be fulfilled by trading the physical commodity or exchanging cash in place of the underlying asset. They are usually traded through an exchange.

Platinum as an investment

The automotive industry creates the highest demand for platinum. Platinum is a key component in manufacturing catalytic converters, which are responsible for reducing vehicle emissions.

In addition to the automotive industry, platinum is widely used in the industrial industry to create medical products, nitric acid and glass. As the demand for these products rises, so does the price of platinum.

It is anticipated that platinum will play an essential role in the development of hydrogen technology. Platinum is used to produce carbon-free hydrogen from renewable energy.

“If hydrogen-based power meets expectations in the coming decade, then one could expect a material demand tailwind in platinum,” said Stash Graham, managing director of Graham Capital Wealth Management.

Precious metals such as platinum, gold and silver have long been used to diversify an investment portfolio.

When choosing investments, it is crucial to consider potential drawbacks. While there may be an increase in the demand for platinum, other factors may throw a wrench in the investment benefits.

When considering an investment, it is essential to consider your current holdings and individual financial goals.

Platinum is rarer than both silver and gold, which could make it attractive to investors seeking a scarce metal. This practice helps protect other holdings, such as stocks, in an economic downturn. Investing in platinum can help balance inflation and economic uncertainties.

Frequently asked questions (FAQs)

Do platinum prices move with silver and gold?

Platinum pricing is set independently from gold and silver prices, yet there is a historical correlation between the prices of these metals. Although platinum is rarer than silver and gold, metals with industrial uses tend to fluctuate similarly.

What is the highest price platinum has ever been?

The highest platinum price was $2,213 on March 3, 2008. This notable high can be attributed to critical supply issues in South Africa, the world’s largest platinum producer. Both geopolitical and economic factors played a role in this price hike during the recession.

ChiniMandi, Mumbai: 1st April 2024

Domestic Market

Domestic sugar were mixed today

Domestic sugar prices in major markets were reported to be mixed, with prices falling in Uttar Pradesh while rising in Maharashtra. However, given the higher monthly prices, they are expected to remain under pressure in the coming days. Furthermore, demand is said to be weak in the major markets, which is likely to weigh on prices.

In Muzaffarnagar, M-grade sugar costs between Rs 3,750 and Rs 3,780 per quintal, while S-grade sugar is expected to cost between Rs 3,420 and Rs 3,460. Agrimandi expects the price of S grade sugar in the Kolhapur market to fall to between Rs 3,380 and Rs 3,460 per quintal within the next two weeks.

Ex-mill Sugar Prices as on  April, 1 2024 :

Destination-wise Spot Prices as on April, 1 2024 :

 

International Market

At the time of writing this update London White Sugar #5 front month contract is not trading today on an occasion of Easter Monday, whereas the New York Sugar #11 front month contract is trading at 22.62 c/lb.

Currency, Commodity & Indian Indices

The rupee traded against the US dollar at 83.393 whereas USD was trading with BRL at 5.0147, Crude futures traded at ₹6916, Crude WTI traded at $82.88 barrel. Sensex closed 363.20 points higher at 74014.55 whereas Nifty ended 135.10 points higher at 22462.00

News Round-Up

Sugar production in Maharashtra crosses more than 107 lakh tonnes; 140 mills end operations

Sugar production in Maharashtra crosses more than 107 lakh tonnes; 140 mills end operations

Industry needs to adopt forward-looking approach to produce sugar as per changing consumer behaviour and other factors

Industry needs to adopt forward-looking approach to produce sugar as per changing consumer behaviour and other factors

Sensex, Nifty hit new highs

Sensex, Nifty hit new highs

 

XAU/USD Current price: $2,239.91

• Upbeat United States data confirmed Federal Reserve’s conservative approach to rate cuts.
• Stock markets returned from the long weekend with a soft tone, Wall Street dips.
• XAU/USD retreats from record highs, retains its bullish stance.

Gold price retreats from a fresh record high of $2,265.58 a troy ounce. XAU/USD rallied during Asian trading hours but turned south during European ones. XAU/USD currently trades around $2,240, as the US Dollar gathered momentum following the release of a much-better-than-anticipated United States (US) ISM Manufacturing PMI. The report showed that economic activity in the manufacturing sector expanded in March after contracting for 16 consecutive months, with the index jumping to 50.3 from 47.8 in February.

S&P Global also released the final estimate of its Manufacturing PMI, which was confirmed at 51.9,  below the 52.5 expected but still with expansionary levels. The report added that “signs of improving wider economic conditions and market demand fed through to a further expansion of US manufacturing production in March, with the rate of expansion hitting a 22-month high. The rate of job creation also quickened, but new order growth softened.”

Meanwhile, Wall Street turned south. US indexes are down following the extended weekend, with the Dow Jones Industrial Average down over 200 points. Markets are posting a late reaction to Friday’s events. On the one hand, the Bureau of Economic Analysis (BEA) reported that the core Personal Consumption Expenditures (PCE) Price Index rose 0.3% MoM and 2.8% YoY in February, as expected. On the other hand, Federal Reserve (Fed) Chairman Jerome Powell participated in an interview open to questions, in which he repeated that the Fed is in no hurry to cut rates, as economic growth remains strong and inflation is above target.

Treasury yields are firmly up, with the 10-year note offering 4.33%, up 12 basis points (bps) and the 2-year note yielding 4.71% after adding 10 bps, both flirting with March highs.

XAU/USD short-term technical outlook

The daily chart for the XAU/USD pair shows it filled an opening gap and bounced back while currently trading unchanged around its daily opening. The same chart shows moving averages maintain their bullish slopes far below the current level, reflecting bulls’ dominance. At the same time, technical indicators have lost their upward strength but remain within positive levels, with the Relative Strength Index (RSI) indicator currently consolidating around 76, with no signs of giving up.

Spot gold is correcting near-term extreme overbought conditions, as the 4-hour chart shows technical indicators retreated sharply, heading south almost vertically although well above their midlines. At the same time, moving averages have partially lost their upward momentum but are developing below the current level, with the 20 SMA currently providing dynamic support at around $2,208.05.

Support levels: 2,228.40 2,208.05 2,184.70

Resistance levels: 2,250.00 2,265.60, 2,280.00

XAU/USD Current price: $2,239.91

• Upbeat United States data confirmed Federal Reserve’s conservative approach to rate cuts.
• Stock markets returned from the long weekend with a soft tone, Wall Street dips.
• XAU/USD retreats from record highs, retains its bullish stance.

Gold price retreats from a fresh record high of $2,265.58 a troy ounce. XAU/USD rallied during Asian trading hours but turned south during European ones. XAU/USD currently trades around $2,240, as the US Dollar gathered momentum following the release of a much-better-than-anticipated United States (US) ISM Manufacturing PMI. The report showed that economic activity in the manufacturing sector expanded in March after contracting for 16 consecutive months, with the index jumping to 50.3 from 47.8 in February.

S&P Global also released the final estimate of its Manufacturing PMI, which was confirmed at 51.9,  below the 52.5 expected but still with expansionary levels. The report added that “signs of improving wider economic conditions and market demand fed through to a further expansion of US manufacturing production in March, with the rate of expansion hitting a 22-month high. The rate of job creation also quickened, but new order growth softened.”

Meanwhile, Wall Street turned south. US indexes are down following the extended weekend, with the Dow Jones Industrial Average down over 200 points. Markets are posting a late reaction to Friday’s events. On the one hand, the Bureau of Economic Analysis (BEA) reported that the core Personal Consumption Expenditures (PCE) Price Index rose 0.3% MoM and 2.8% YoY in February, as expected. On the other hand, Federal Reserve (Fed) Chairman Jerome Powell participated in an interview open to questions, in which he repeated that the Fed is in no hurry to cut rates, as economic growth remains strong and inflation is above target.

Treasury yields are firmly up, with the 10-year note offering 4.33%, up 12 basis points (bps) and the 2-year note yielding 4.71% after adding 10 bps, both flirting with March highs.

XAU/USD short-term technical outlook

The daily chart for the XAU/USD pair shows it filled an opening gap and bounced back while currently trading unchanged around its daily opening. The same chart shows moving averages maintain their bullish slopes far below the current level, reflecting bulls’ dominance. At the same time, technical indicators have lost their upward strength but remain within positive levels, with the Relative Strength Index (RSI) indicator currently consolidating around 76, with no signs of giving up.

Spot gold is correcting near-term extreme overbought conditions, as the 4-hour chart shows technical indicators retreated sharply, heading south almost vertically although well above their midlines. At the same time, moving averages have partially lost their upward momentum but are developing below the current level, with the 20 SMA currently providing dynamic support at around $2,208.05.

Support levels: 2,228.40 2,208.05 2,184.70

Resistance levels: 2,250.00 2,265.60, 2,280.00

• Gold price kicks off Q2 and Easter Monday at a new all-time high above $2,250.
• US Dollar stays subdued amid upbeat mood, soft Core PCE inflation data.
• Gold price hits the Bull Flag target at $2,251, a correction in the offing?

Gold price is consolidating the latest uptick to a new all-time high of $2,260, kicking off Easter Monday and the second quarter of 2024 on a positive note. Extended Easter holiday-induced thin liquidity conditions aid the Gold price uptrend amid a broadly subdued US Dollar.

A June Fed policy pivot bets underpin Gold price

The US Dollar remains defensive, as markets set off the new quarter with optimism, especially after China’s Manufacturing and Services PMI data surpassed expectations in March. On Sunday, China’s official Manufacturing Purchasing Managers’ Index (PMI) jumped to 50.8 in March, compared with the 49.1 contraction reported in February and above the estimates of a 49.9 figure. The Non-Manufacturing PMI rose to 53.3 in the same period vs. February’s 51.4. Meanwhile, China’s Caixin Manufacturing Purchasing Managers’ Index (PMI) edged higher to 51.1 in March on Monday, beating estimates of 51.0.

Additionally, increased bets that the US Federal Reserve (Fed) will begin lowering interest rates in June, following Friday’s US Personal Consumption Expenditures (PCE) Price Index, exert downside pressure on the US Dollar, keeping Gold price underpinned.

Inflation in the US, as measured by the change in Personal Consumption Expenditures (PCE) Price Index, increased slightly to 2.5% on a yearly basis in February, data released by the US Bureau of Economic Analysis (BEA) showed Friday. The reading met the consensus forecast and followed January’s 2.4% increase. The Core PCE Price Index, which excludes volatile food and energy prices, rose at an annual pace of 2.8%, in line with the market expectations but slowing from a 2.9% increase reported previously.

Markets are currently pricing a 68% probability of a June Fed rate cut, up from 63% seen before the PCE data release. Heightened expectations of a June Fed rate cut come even after Fed Chair Jerome Powell said Friday that “the economy is strong” and there is “no hurry to cut rates.” Powell participated in a discussion at the Macroeconomics and Monetary Policy Conference, in San Francisco, on Friday.

Looking ahead, the US Nonfarm Payrolls data, due on Friday, will be critical to sealing in a June Fed rate cut, having a significant impact on the value of the US Dollar and on the Gold price direction. In the meantime, the return of full markets in the US after the long Easter weekend break could trigger a bout of profit-taking in Gold price, as markets resort to position readjustment, in anticipation of the US employment data, trickling in from Tuesday.

Later on Monday, the US ISM Manufacturing PMI data will be also closely scrutinized for fresh hints on the strength of the US economy, influencing the market’s pricing of the Fed rate cut expectations and, in turn, the non-interest-beating Gold price.

Gold price technical analysis: Daily chart

As observed on the day chart, Gold price achieved the Bull Flag target measured at $2,251 on its way to renewing the lifetime highs at $2,260 on Monday.

The 14-day Relative Strength Index (RSI), lies in the extremely overbought zone near 80.0, suggesting that Gold price remains primed for a corrective pullback any time soon.

If that happens, the immediate support could be found at the previous record high of $2,236 set on Thursday. A breach of the latter could fuel a sharp drop toward the $2,200 threshold.

Further south, Thursday’s low of $2,187 will be challenged, followed by the bullish 21-day Simple Moving Average (SMA) at $2,168.

Should Gold buyers manage to defy the bearish odds, a test of the $2,270 round level cannot be ruled out.

The next on Gold buyers’ radars will be the $2,300 psychological level.

 

The United Arab Emirates (UAE) is slashing exports of its Upper Zakum grade as it is diverting more volumes of the medium sour crude to a huge domestic refinery, traders and analysts have told Reuters.

ADNOC, the state oil and gas firm of one of OPEC’s top producers and exporters, is estimated to have shipped around 650,000 barrels per day (bpd) of Upper Zakum crude in March, compared to a monthly average of around 940,000 bpd throughout 2023, according to Rystad Energy data cited by Reuters.

At the same time, ADNOC has exported more volumes of the lighter and sweeter grade Murban to replace lower volumes of Upper Zakum, according to traders and analysts.  

More Upper Zakum crude is now being run at ADNOC’s refurbished Ruwais refinery, which has a capacity to process 837,000 bpd of crude. 

Back in 2018, ADNOC said it would invest $3.1 billion to introduce crude processing flexibility at its Ruwais oil refinery. Since then, the refinery has been modified to enable ADNOC’s Ruwais Refinery-West complex to process up to 420,000 bpd of Upper Zakum crude or similar crude types. This has freed more volumes of the UAE’s Murban crude, which fetches a higher price on the global oil markets, to be utilized for export sales.

Commenting on the refinery modification at the time, ADNOC said that “we can maximise the benefit of price differentials to enhance refinery margins, improve the middle distillate products and release valuable Murban crude into the market.”

ADNOC began using Upper Zakum at its domestic refinery in September last year, traders told Reuters.

Later in the autumn of 2023, sources familiar with ADNOC’s plans told Reuters that the Abu Dhabi firm had already notified some of its term customers that it would reduce the volume of Upper Zakum supply in 2024. 

On the other hand, the UAE has said it would boost supply of the more expensive Murban crude, especially as the Middle Eastern producer won a higher quota under the OPEC+ agreement for 2024.

“Barrel-for-barrel, Murban brings more revenue for equal compliance,” Adi Imsirovic, director of Surrey Clean Energy, told Reuters.

Importers of the UAE’s medium sour grade Upper Zakum, most of all China, will now have to scour the market for other sources of heavier crude.   

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

U.S. natural gas producers are slashing production in response to multi-year low prices. But they are also looking beyond the current slump, preparing to turn on more output by flexible operation of their inventory of wells.  

“Natural gas is currently pricing at or below costs of production,” an executive at an exploration and production company said in comments in the quarterly Dallas Fed Energy Survey released this week. 

Prices are historically low due to weak winter demand amid milder weather, record output at the end of 2023, and higher-than-average natural gas stocks.  

Working natural gas stocks in the week to March 22 were 41% more than the five-year average and 23% higher than last year at this time, per the latest EIA data. 

The oversupply and low prices have prompted many producers to start reducing production. But some are also stocking up inventories of wells ready to start pumping – or to be turned in line – as soon as prices rebound. Producers expect natural gas prices to recover next year amid growing demand for LNG exports and new LNG export plants that are slated to begin operations in 2025. 

“All of us in the natural gas business are pinching as many pennies as we can right now,” Josh Viets, Executive Vice President and Chief Operating Officer at Chesapeake Energy, told the audience at Hart Energy’s DUG GAS+ Conference & Exhibition 2024 in Louisiana this week. Related: Against All Odds American Oil Soars Under Biden

But Chesapeake Energy, set to become the top U.S. natural gas producer after the planned merger with Southwestern Energy, is also deferring production from around 80 wells this year, which would give it up to 1.0 bcf/d of productive capacity available from deferred turn in line wells (TILs) by the end of 2024. 

“The way I like to think about it is we’re using the reservoir as storage,” Viets told the conference, as carried by Bloomberg. 

“When the market says, ‘hey, I need more gas,’ we’ll be in a position to quickly restore that to help meet the needs of consumers.”

In the Q4 2023 earnings release in February, Chesapeake Energy said it would be building productive capacity to align with consumer demand. By year-end, the company plans to have deferred around 35 drilled but uncompleted wells (DUCs) and about 80 TILs. A measured approach to production activation would be responsive to market demand, Chesapeake noted. 

Other U.S. natural gas drillers, including the current top producer EQT Corporation, have also reduced output in response to the low domestic prices. 

“The low prices we are experiencing now are causing us to tuck it in and keep our powder dry,” an executive at an E&P company said in comments to the Dallas Energy Survey. 

“While companies are certainly protective of cash flow, they all want to be ready to service the next wave of LNG projects coming online in 2025,” Erin Faulkner at Enverus wrote this week. 

Despite multi-year low natural gas prices in the United States, domestic producers continue to be optimistic about the long-term prospects of gas as a fuel, both in America and abroad.  

Recent deals for LNG supply and midstream expansion point to an optimistic view in the industry about global gas demand and the role the U.S. could play in meeting said demand, despite the halt to LNG permit reviews.  

Chesapeake, for example, signed in February its first LNG Sale and Purchase Agreements to buy around 0.5 million tonnes per annum of LNG from Delfin LNG at a Henry Hub-linked price with a targeted contract start date in 2028. Chesapeake will then deliver the LNG to commodity trader Gunvor on an FOB basis with the sales price linked to the Japan Korea Marker (JKM) for a period of 20 years.  

Pipeline giant Enbridge announced this week a joint venture to build and operate natural gas pipelines connecting gas supply from the Permian to the U.S. Gulf Coast to tap into growing LNG export demand. 

Henry Hub prices are set to rise by the end of 2024, and further still in the medium term, according to executives polled in the Dallas Fed Energy Survey. 

Survey participants expect a Henry Hub natural gas price of $2.59 per million British thermal units (MMBtu) at year-end, compared to an average price of $1.44 per MMBtu through most of March when the survey responses were collected. Executives see Henry Hub prices at $3.18 per MMBtu two years from now, and at $3.94 per MMBtu five years from now.   

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

By Doug Tenney, Leist Mercantile

Following a great dinner at home recently, Cindy asked, “So, Doug, if you were preparing tomorrow night’s meal, what would you make?” Hmn…My response, “Remember that time I made a baloney omelet?” I was immediately disqualified. Producing a meal requires skill, planning, experience, and common sense — just like producing crops. No baloney about that!

Recent price activity for CBOT wheat has been extremely disappointing. During the first half of December 2023, July CBOT rallied to $6.66 in the midst of a 3-day buying spree when China bought 41 million bushels of US wheat. Fast forward to the week of March 11. Disappointment was plentiful when in 3 successive days China announced several cancelations of U.S. wheat purchases totaling 18 million bushels. That same week China was also canceling wheat purchases from Australia and France. Corn, soybeans, and wheat all took huge price declines from December into February. While corn and soybeans reached contract lows the week of Feb. 26, wheat continued to move lower into the first half of March when July CBOT reached its most recent contract low at $5.37 ¾. It made multiple new contract lows in both February and March.

U.S. wheat producers last fall were obviously optimistic on prices as total acres estimated by USDA for 2023-2024 were expected to reach 49.6 million acres, up 3.8 million acres or 8% from 2022-2023. While many producers were applying nitrogen the last half of March and into early April, some producers were at least contemplating destroying wheat due to the price declines since December. Instead, they would plant corn or soybeans.

There continues to be growing confusion on world soybean imports into China. On one hand, the March USDA WASDE Report detailed China would be importing 105 million tons, a furious appetite of world soybeans for the current marketing year which ends August 31. That is an increase of 3 million tons from the Feb. 8 WASDE Report. The 105 million tons of soybean import is a monstrous number, the equivalent of 3.858 billion bushels, using nearly 93% of U.S. soybean production from 2023 if China imported exclusively U.S. soybeans. Of course, that will never happen but the comparison is mentioned only to highlight the vast import number. Here’s the confusion. To date, China has been buying very little of Brazil soybeans, while the latest U.S. soybean sale of 11 million bushels was on Jan. 19.

Into early March, Brazil farmers were extremely disappointed with the snail-like pace of soybean sales to China. Noticeably absent from the headlines has been any mention of Brazil soybean sales to China, which weeks earlier accounted for only 3 to 8 cargoes, roughly 2 million bushels per cargo, each week on several instances in January and February. Brazil’s soybean harvest to date was progressing faster than normal. It proved to be frustrating that soybean prices were declining along with the basis also widening as harvest progressed.

May 2024 CBOT soybeans reached a recent high at $12.17 ½ on March 14 up 20 cents on the day. That morning, Brazil farmers were heavy sellers of soybeans, putting an end to the mid-morning rally, as soybeans were down one penny on the close. Evidently, the 2-week rally of nearly 90 cents caught lots of attention when it was recognized for the steep climb in just two short weeks from its contract low of $11.28 ½ on Feb. 29.

Why is there a big spread between USDA and Conab, Brazil’s food agency on Brazil’s production numbers for soybeans and corn? USDA projected Brazil’s soybean production at 155 million tons and the Brazil corn production at 124 million tons. Conab has projected the Brazil soybean production at 146.8 million tons with the Brazil corn production at million 112.7 tons. You would think the numbers would be much closer.

Last month I was with a group from the Fairfield Soil & Water Conservation District touring two solar farm projects in Ross County. We were able to see their construction methods which included racking systems and panel placements that followed the contour of the topography. Their use eliminated the need for moving huge amounts of soil to have table top consistency across the project. In addition, the projects utilized a special mix of grasses grown onsite before the project started, then baled for future seeding efforts. This eliminates the need for straw to be imported from outside the project area, preventing plant species not already present at the project sites.

Thought for the day, “When you don’t know what you’re talking about, it’s hard to know when you’re finished.” – Tom Smothers.