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by Stockwatch Business Reporter
West Texas Intermediate crude for March delivery lost 75 cents to $49.57 on the New York Merc, while Brent for April lost $1.20 to $53.27 (all figures in this para U.S.). Western Canadian Select traded at a discount of $18.46 to WTI, up from a discount of $18.50. Natural gas for March lost nine cents to $1.77. The TSX energy index added a fraction to close at 129.99.
The big news in the oil patch continued to be the new cost estimate that arrived on Friday for the Trans Mountain pipeline expansion project, showing that the cost of the project has ballooned all the way to $12.6-billion. This is a 70-per-cent increase from the $7.4-billion estimate announced three years ago and is more than double the $5.4-billion estimate announced seven years ago. Regulatory delays and protracted court battles are the prime culprits for the cost overruns. Although the swollen price tag caused plenty of pearl-clutching among politicians and op-ed columnists, Trans Mountain's president, Ian Anderson, stayed upbeat. He said he is confident in the revised cost estimate and the proposed in-service date of late 2022. Not only is the project still commercially viable, added Mr. Anderson, but it has "established the very highest benchmark for the development and construction of a major energy infrastructure project" -- surely something of a silver lining, or perhaps a diamond-encrusted gold one, given what this apparent honour has cost.
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