Crude Observations

Doctor’s Orders

Well it’s been quite the week hasn’t it? Exhausting is one word that comes to mind. Overwhelming is another. Actually scratch that. It’s been literally months of this energy and pipeline roller-coaster, such that I feel sometimes I am close to losing my mind.


Speaking of which, I was recently doing a little investigative work for a client who was very curious about the “personalities behind the stories” as he believes that if you truly understand what motivates someone you can make investment profits by exploiting that. My own personal opinion, careful what you wish for, but as they say in the business, the customer is always right and as long as the cheques don’t bounce, carry on, right?


So there I was, trying to do in-depth research (private investigator work really) into a virtual who’s who of global influencers when I discovered much to my amazement that all of this assortment of crackpots, potheads, reprobates, government charlatans and erstwhile corporate titans go to the same therapist. How cool is that?


Channeling my best inner Thomas Magnum (the old one, sorry, the new show hasn’t really done it for me so far), I hopped in my red Ferrarri (otherwise known as a silver Tahoe) and raced to the esteemed doctor’s office, picked the lock on the door and located the filing cabinet where all the juicy details were kept. Using a trusty spy camera I had purchased from an Archie comic, I snapped pictures of all the relevant files and developed them in Higgins’ darkroom. The results did not disappoint – dare I say it – they may actually BLOW YOU AWAY!


Here is just a sample, the rest went to my client.


Patient: Justin Trudeau


Patient presents as supremely confident, bordering on arrogant. Speaks eloquently an any number of subjects yet displays an astonishing lack of depth aside from what would typically be called soundbites. Is profoundly discomfited when forced off script.


Impulsive and driven by a very firm belief in his intellectual superiority the patient cited two instances where he “winged it” in the face of his many advisors and sycophants (the “smalls” as he calls them). The first was related to something called the Great Bear Rainforest which he admits is a fiction and how he used that fiction as a pre-text to impose a tanker ban off the coast of British Columbia in an area that his own government ironically identified as perfect for shipping. The second instance relates to a pipeline expansion project – the details are fuzzy, however the patient decided at one point that he was going to “buy the damn pipeline and be a frickin’ hero in Alberta, unlike the old man!”. So convinced was he of the righteousness of this move that he did the first valuation of the pipeline himself before giving way to professionals. As a taxpayer, I say thank you.


A final point is that the patient spends an inordinate amount of time in private talking about and trying to measure up to his famous father even claiming at some point that he should be considered an equal. Ironically he forced me to watch the attached video on YouTube which of course only goes to show how intellectually bereft the apple is next to the tree. What world leader engages in an six-minute off the cuff tete a tete with a hostile media – it’s like watching an intellectual, well-spoken Trump!


Diagnosis – Narcissist with severe paternal abandonment issues


Treatment – physical exercise and hardship. Recommend a three month sabbatical beginning in January to work as a welder’s assistant on one of the spreads building the North Montney Loop.


Patients A through Z: CEO’s of the 26 largest upstream oil and gas companies in Canada


To a man (and I believe they were all men) these patients present as jittery and quick to anger, followed by bouts of lethargy and, on occasion, uncontrolled crying.


Each patient tells some variation of the same story. Once upon a time they were all running very successful companies until one day the price of oil collapsed and they had to lay off half their staff. After a couple of years of group therapy, the nightmares and memories of the employment devastation seem to have finally worn off, even though they are still often triggered  by such things as a footfall in an empty office tower, the sight of a boarded up once-favourite restaurant or the laughter of children at a Christmas party. I t was only last year that finally all the problems were solved but then they all started complaining of being stuck in a rut. Their companies are making money but not enough to hire or expand. All their US and international peers were leaving for something called the Permian and they are left behind to pick up the pieces. Where once government seemed to be on their side, there were more and more hoops to jump through to get things done, costs were increasing through taxes and still the offices are hollow, empty and echoing.


Patients also describe a sensation of intense hostility from the general public, particularly when they go on road shows to promote their companies in places like Toronto, Vancouver and New York. One patient described the feeling during a group therapy session as follows: “I know it sounds irrational but I could feel everyone staring at me and the voices (shudder). Climate murderer. Carbon fiend. Then it felt like I was being pelted with rocks and hit around the head with 6 inch pipe but when I turned around there was no one there.” Most of the CEOs in the room had experienced some variant of that sensation. “You know, even with all the money we make, it can’t mask the dread.” said another.


In a recent visit, the group seemed particularly defeated. They told stories of projects cancelled or postponed, an inability to get their product to any market that would pay a fair price and, as a corollary, a market so uninterested in their product that they are forced to sell it for close to a 60% discount to a comparable product produced by a brutal dictatorship thousands of mile away. “How do you think that makes us feel?” the group lamented. “Cast aside and forced to fend for ourselves by our government, our investors, the media, the public at large. Producing a product that everyone needs but apparently no one wants? We are the scourges of modern civilization. The equivalent of medieval morticians (a strange comparison). Absolutely critical to society but vilified and hated. If it weren’t for the money, where would we be?” This lament is typically followed by crying, a group hug and, on occasion, evil laughter.



Diagnosis – Clearly the patients are all suffering from some form of depression and borderline Oilpatch PTSD


Treatment – Whiskey for the depression and a regimen of therapy and physical exercise for the OPTSD. Therapy will include increased volunteer hours (not the Olympics) and encouraging mentorship with the young entrepreneur class that has been out of a job for at least the last 36 months. It would also be beneficial for this group in particular to spend some time out in the field so they could learn how resilient the workers there are. Last point – all of these individuals displayed an almost manic optimism which, while misplaced, should nonetheless not be discouraged. It may indeed be the case that the cure for what ails them is a simple $10 rally in Canadian oil prices. In the meantime, a steady diet of quarterly reports showing obscene profits should help.



Patient: Jason Kenney


This patient is characterized by a manic energy and likely short temper that you can observe always simmering below the surface. One can sense in this patient that he is very secure in his intellectual superiority and that he feels if only he were allowed to demonstrate his smarts that surely you would be won over to his way of thinking. That said, the patient appears to be able to exercise remarkable restraint even though the boiling temperature is always close at hand. People with these traits are also characterized as incredibly hard-working and singularly task-oriented, often to the exclusion of all else around them. This mania appears to have proper bounds in this patient as evidenced by excellent personal hygiene and a meticulous attention to his attire. Another key trait is impulsivity and the patient has confessed that on occasion he is prone to grabbing the latest headline stat and treating it as a “gotcha” moment in what is now month 24 of his quest to the next premier of Alberta, a goal that while on the surface seems to be a desirable outcome, as one would see if one could look at other patient files, not such a great gig after all.


Ultimately, this patient has an overwhelming need to win and will try to win at all costs, but also evidences a surprisingly strong moral compass and will stay assiduously within the rules. For them the victory matters but they know they are ordained to win and are offended at the mere suggestion of bending or breaking rules to procure an advantage. Not a bridge builder with those who disagree with him, this patient is sure to be as combative as they come should (once?) victory is secured and will thrive off the chaos of the conflicts he creates be it with an official opposition or the presumptive federal overlords.


Diagnosis – Not a real thing, but clearly this patient suffers from what most would call a “Napoleon Complex” which seems a cheap shot given his height, but when the bicorne fits…


Treatment – This type of patient is remarkably resistant to treatment, however the recommended treatment here is an extended vacation (it is likely this individual has never actually taken one) of at least 6 weeks at a lake with a case of Alberta Premium Rye.


Patient: Saudi Prince (unnamed)


This patient has just recently come to me for treatment. He is a young man in excellent health. Well educated and very well put together. His tendency to speak of himself in the third person betrays a man who is used to having people follow his every word without question. During our few sessions he has confided in me a deeply-rooted and troubling desire to secretly “do away” with anyone who bothers him, even for the most seemingly trivial matters. He recounted gleefully how he imprisoned no less than 20 of his cousins and once had a butler beheaded for pouring him tea from the wrong side. I have been working with this patient to develop more self-control by, for example, going down to the Royal garage and counting Bentley’s before making any rash decisions. Another way for this individual to avoid ugly situations is to remove himself from the menagerie of courtiers and sycophants who hang on his every word, try to curry favour at every turn and take every statement he makes as a literal order.


Diagnosis – While it is still too early to tell whether this individual is a psychopath or a sociopath, either shoe appears to fit especially given the overall lack of empathy demonstrated during our brief time in therapy.


Treatment – While the typical recommendation here is a round of anti-psychotics, given the wealth of the patient and the resources available to him and, of course, his many, many bodyguards, the treatment option that may work best is much more holistic in approach. Thus the treatment we are following is designed to elicit and activate the empathetic part of the brain so we have started a weekly “cat café” regimen wherein the patient is allowed to interact with, on average, 10 to 12 cats of various ages in the hopes of soothing some of the more anti-social urges.


Patient: Donald Trump


This is an interesting case that was referred to me by a colleague at Stanford where she is a professor of psychology. At any rate this colleague received a call from this individual who confessed to her that he felt he had some kind of Obsessive Compulsive Disorder that compelled him to spend a significant portion of his time either bullying people online or compulsively lying about… pretty much everything actually. Upon finally consulting with this patient, I was informed that he was yugely rich, had all the best things and the best words, was a stable genius and is incredibly successful, more so than any president who had come before or after him – in fact more successful than any leader in the modern world or in the past, except maybe his very good friends Vlad Putin and Kim Jong Ooooooon, who were beautiful people, like him.


Diagnosis – Pathological liar with narcissistic tendencies. Could it have been anything else? This type of diagnosis is pretty much standard for real estate developers by the way, so nothing unique here.


Treatment – Treatment for this disorder used to be electric shock therapy, however tempting as that sounds in this instance, we don’t actually do that anymore. Instead, what we do here at the clinic is what we like to call “truth immersion” wherein the patient is confronted by a group of people he purportedly respects and every time he tells an untruth, it is the job of this group to immediately correct him. The problem with this approach of course is that if the patient also displays narcissistic tendencies they will either get incredibly defensive or become depressed – sometimes both. However, under clinical trials, this treatment has a 50% chance of success, 25% of the time. For the bullying there is really no solution until someone is found who can stand up to him. It has been suggested that Justin Trudeau could challenge him to one of his infamous boxing matches but the spectre of two narcissists circling each other in a boxing ring for anything more than a round is kinda gross.


Patient: Rachel Notley


Ms Notley has been a complex patient for pretty much most of the past four years. I first saw her after her surprise election victory wherein she was elected Premiere of Alberta a job she describes as a cross between a lifetime dream and being eaten alive by ants if the lifetime dream was to be lobotomized daily by raccoons without the use of painkillers.


Riven by doubt and a fear of failure, the patient persevered through the political landscape, adjusted attitudes towards the economy, instituted both major and incremental change, endured insults focused on both her politics and her gender, read the regular death threats and twitter nonsense all while trying to maintain a sense of purpose and humour.


It was only three short months ago that the patient finally seemed to have tamed the demons of self-doubt and was in full confidence in her position when, as inevitably happens, she was stabbed in the back by the incompetence of the federal government and left to twist at the side of the road, re-election dreams seemingly in tatters.


The last time she came for therapy, the patient seemed a shell of herself and sat on the sofa clutching her knees tight in the manner of those experiencing a high level of fear. Despite my best efforts, all I was able to get the patient to communicate was the same whisper over and over again – “just need to get it done, just need to get it done, just need to get it done”.


Diagnosis – while the uncertainty and confidence issues at the beginning of the mandate didn’t last very long, it is clear that the penitent suffers currently from an acute case of Macrophobia – the fear of prolonged waits. This debilitating condition can render its sufferers virtually incapable of participating in the real world until that which they are awaiting comes to pass.


Treatment – the treatment typically called for here is a 22-week intensive review of the what is causing the fear, accompanied by meaningful, two-way consultation to arrive at a hoped for mutually agreed conclusion. Any more than that can prove almost fatal to the ability of anyone suffering this condition to lead a normal life. It is said that sometimes the cause of this fear is betrayal and seeing the betrayer suffer a similar professional loss can be quite therapeutic alhough in this instance that would require extending the therapy into late 2019.


Patient: Anonymous Pipeline Proponent


This patient presented himself to me recently, sneaking into my office after one of my group therapy sessions with the oil and gas executives. Nervous, twitchy, uncomfortable in his own skin and constantly looking over his shoulder, this patient was clearly a wreck. For close to ten years this individual had pursued a project with singular zeal and commitment, spending upwards of $1 billion in shareholder money under the assumption that once a government said something would be done, it would. That rules were rules, approvals meant approvals and that the law of the land was paramount. At once exhibiting great confidence, the patient suffered from periodic breaks where it was clear the patient felt very strong levels of persecution followed almost immediately by an overwhelming level of braggadocio where the patient shouted out for all to hear that this pipeline was coming through dammit, only to lapse into persecution mode again and apologize profusely for even thinking of running a pipe within a 150 mile buffer from my vegetable garden. This continued for session after session and the descent into madness soon stared to consume even me. Government this, consult that, Bill C69, NEB, first nations consultation, approved, denied, appealed, won, lost, back to the drawing board, alternate route, tanker ban, Trudeau, traitor, Harper, differential, tidewater, bitumen, dilbit, batching, spreads on, spreads off, cost escalation, Notley, plots, plans, Suzuki, Weaver, carbon tax. It got so bad that at our last session I was forced to sedate the patient by clubbing him over the head with a handy set of calipers.


Diagnosis – Government-induced Paranoid Schizophrenia. Was there ever really any doubt?


Treatment – Sadly this patient was so far gone I had to have him committed for his own safety. The facility provides padded walls, 30 minutes of weekly visitation, three meals a day and a garden in need of an irrigation system that will hopefully allow for some “pipeline” therapy.


Patient: Local M&A Professional


This is my newest patient. An interested observer of the world around him, this patient finds himself frustrated at the best of times at his inability to influence events as much as he would like to. Prone to internalize, this patient’s defence mechanism is to make fun of everything he observes by writing a weekly blog…


Hey! Wait a second – this is MY FILE!


… which of course is very therapeutic in the face of uncertainty, much like a diary to a teenaged girl (hey!). Aside from that the patient presents with the typical egocentric personality typical of an M&A professional and is prone to extended periods of what can best be described as grumpiness when he doesn’t get his way. On the other hand, this patient is unfailingly optimistic regarding the future of the industry but appears to have an unhealthy obsession with the natural gas market which, if you can believe it, he expects to turn around “for real this time” very soon.


Diagnosis – Mild depression, narcissism, mildly passive aggressive, sarcasm disorder, overly optimistic disorder, you name it. A little bit of everything, even a little bit of Witzelsucht disorder.


Treatment – This is an M&A dude. The treatment is simple. Close deals. Get new clients. Close those deals. It will take some cooperation, but I have consulted with other experts and feel the cure is around the corner.


So there you have it – see what happens when you break into a therapist’s office and read the secret files? No good can come of it!


Prices as at October 19, 2018, (October 12, 2018)

  • The price of oil rose early then fell during the week on a combination of supply build, Saudi tensions, Iran shipping and stock market jitters.
    • Storage posted a big increase
    • Production was up marginally
    • The rig count in the US was up
  • After a smaller than expected injection, natural gas was up slightly for the week…
  • WTI Crude: $69.34 ($71.61)
  • Western Canada Select*: $26.09 ($25.90)
  • Nymex Gas: $3.247 ($3.150)
  • AECO Spot*: $0.11 ($1.42)
  • US/Canadian Dollar: $0.7636 ($0.7674)

*Due to overwhelming interest, we are now including prices for Canadian commodities, in case you weren’t angry enough.


  • As at October 12, 2018, US crude oil supplies were at 416.4 million barrels, an increase of 6.4 million barrels from the previous week and 40.0 million barrels below last year.
    • The number of days oil supply in storage is 25.4 compared to 28.6 last year at this time.
    • Production fell during the week at 10.900 million barrels per day (300k barrel decrease). Production last year at the same time was 8.406 million barrels per day. The decrease was seen mostly from the lower 48.
    • Imports rose from 7.397 million barrels to 7.615 million barrels per day compared to 7.483 million barrels per day last year.
    • Exports from the US fell from 2.576 million barrels per day to 1.782 million barrels per day last week and from 1.798 million barrels per day a year ago
    • Canadian exports to the US were 3.424 million barrels a day, up from 3.274
    • Refinery inputs rose marginally during the during the week at 16.316 million barrels per day
  • As at October 12, 2018, US natural gas in storage was 3.037 billion cubic feet (Bcf), which is about 17% lower than the 5-year average and about 17% less than last year’s level, following an implied net injection of 81 Bcf during the report week
    • Overall U.S. natural gas consumption rose 6% during the report week
    • Production for the week was flat. Imports from Canada decreased 14% from the week before. Exports to Mexico decreased 5%
    • LNG exports totaled 16.9 Bcf
  • As of October 15, 2018, the CAODC Canadian rig count was 306 (AB – 217; BC – 24; SK – 60; MB – 5; Other – 0. Rig count for the same period last year was 358.
  • US Onshore Oil rig count at October 19, 2018 was at 873, up 4 from the week prior.
    • Peak rig count was October 10, 2014 at 1,609
  • Natural gas rigs drilling in the United States were up 1 to 193.
    • Peak rig count before the downturn was November 11, 2014 at 356 (note the actual peak gas rig count was 1,606 on August 29, 2008)
  • Offshore rig count was down 3 at 19
    • Offshore peak rig count at January 1, 2015 was 55
  • US split of Oil vs Gas rigs is 80%/20%, in Canada the split is 65%/35%


  • MEG rejected Husky Canada’s takeover bid of $11 a share, holding out hope that a white knight buyer will emerge. While there is no doubt the Husky offer is opportunistic and value oriented, unless interest can be drummed up across the border, it is unlikely we will see an offer much north of this. On the other hand, if a competing offer emerges from outside of Canada, this would be a major shot in the arm for Canada.
  • Gibson Energy Inc. announced the sanction of one million barrels of new tank storage at the Hardisty Terminal, underpinned by a long-term agreement with an investment grade, senior oil sands customer.
  • Trump Watch: Heading into the midterms, there is a frenzy of rallies. While it is unclear how much influence these will have, the entertainment value is priceless. Oh yeah, a Saudi journalist is missing – have you heard? This may or may not be a bad thing. Depending.


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