I’m sure you’ll all be pleased to learn that I have my first blister of the almost summer. This is thanks, once again, to my ‘easy-start-feather-lite, no-problems-whatsoever-with-this-puppy’… lawn mower, that I have now named the Marauder!

 I take solace in the fact that the Doctors R Us on the interweb tell me that once the blisters have popped and the bleeding has stopped, Abrakadabra – whatsit… blisters will be replaced with callouses. This will then render my hands numb to any physical abuse that the Marauder may attempt to inflict on my person.

 The term callous can also be used as an adjective to characterize someone who appears hardened or insensitive to a person or a subject of discussion. Such was the case this week when I was asked by a national broadcaster for my views on the possible economic impact of the Fort McMurray disaster, and how it may directly affect consumers in other parts of the country. I let it be known that I found the question callous, in view of the hardships that were being endured as people ran for their lives to escape the inferno – and since the question really was, “How will these events affect the price of gasoline?”

 I understand the media looks at all angles of a story and have a vested interest to keep it going (for the public good and their ratings), so indulge me for a moment because my answer is as complicated as the wildfires are unpredictable.

 In normal times, the interruption of a reported 1,000,000 bpd of crude supply to the U.S., three weeks before the beginning of ‘are-we-there-yet’ summer season, would be cause for serious stomach churning for the Wall Street Speculators, and prices would move up in rapid succession with retreat only a remote possibility.

 Call me a rebel, but I do not foresee ‘the sky is falling’ prices over the long or medium-term, even with the temporary cut back in Alberta supply.

 Here are the reasons for this:

·         The loss of one million bpd is counter-balanced by the global oversupply of about 1.5 million bpd,

·         Current US inventories of crude, gasoline, and distillates are at the least well over the five-year average, and will take some time to erode to levels of concern,

·         The price-fixing OPEC cartel is disintegrating; The Saudis and Iranians are in a determined fight for market share so the crude oil flood will soon become tsunamial, and;

·         The Q1, 2016 downstream results for the US majors were a disaster due to lousy diesel crack spreads; so with U.S. gasoline demand expected to be historically strong this summer, look for refineries to max out production and revert to the MacDonald’s economic principal of low margin, high volume – meaning low pump prices.

The only likely price spikes to be seen will be in the immediate future, and over the next two to three weeks.

 Price increases will be noticeable in refinery markets that use Alberta crude, namely, the Ohio, Michigan, and Illinois hubs. This will affect rack prices in Minneapolis and therefore the Prairie provinces. Increases will also occur in Ontario and Quebec but to a lesser extent, as the Alberta crude content is currently only 50% of the total feedstock pool.

 As for the oil sand workers and volunteer heroes fighting the Fort McMurray fires – it’s true the tough get tougher, and that’s not callous, theirs are hard earned callouses and we respect and appreciate them all!