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by Stockwatch Business Reporter
West Texas Intermediate crude for June delivery plunged $4.16 to $12.78 on the New York Merc, on rising concerns about dwindling storage capacity, while Brent for June (which is less constrained by storage problems) lost $1.45 to $19.99 (all figures in this para U.S.). Western Canadian Select traded at a discount of $8.55 to WTI, up from a discount of $9.50. Natural gas for May added seven cents to $1.82. The TSX energy index added a fraction to close at 66.69.
It is the calm before the storm. First quarter reporting season for oil and gas producers begins tomorrow, with Vermilion Energy Inc. (VET: $5.23) expected to kick things off, followed by Cenovus Energy Inc. (CVE: $4.25), Husky Energy Inc. (HSE: $3.58), Imperial Oil Ltd. (IMO: $18.93) and more over the rest of the week. Dozens of others will follow over the coming month. Investors are bracing not just for financials, but for updates on budget cuts, production shut-ins and -- crucially -- liquidity. These will overshadow any quarterly numbers. One analyst, Canaccord Genuity's Dennis Fong, said two weeks ago that the first quarter numbers will be "largely irrelevant, as the industry in Canada has seen significant change [since then]." He noted that many energy companies have already announced budget cuts and production shut-ins in response to the market turmoil. Yet he expects "significantly more" by the end of May. Among some junior oil producers, for example, Mr. Fong reckons that shut-ins could reach 50 per cent of production.
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financing for what? no storage or they gonna pump it out onto the ground like old days of texas and arabia? gonna buy back the stock with company financing? more stupidity, any producer take delivery of everyone else oil and pumping it back down into the reservoir?