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First Look - Alberta looks to increase crude production

Oil is trading slightly higher, extending gains from yesterday
- WTI prices have continued to push higher, with prices nearing $75/Bbl in the prompt month
- The API forecasts US crude inventories fell by 4 MMBbls last week, ahead of the official EIA data release later this morning
  - This would be the seventh consecutive week of crude draws in the US and the longest streak of declines in three years
Alberta looks to expand oil sales to spur output (BBG)
- Alberta’s government is looking to take a bigger role in the provinces energy sector by selling as much as 1 MMBbl/d in an effort to boost production
- The plan would involve pushing producers to pay royalties in crude rather than cash, according to Alberta’s energy minister
- As part of the announcement, Alberta’s government said it would form a working group with Enbridge to evaluate opportunities to expand pipeline capacity
  - Pipeline capacity has often been at capacity in recent years, weakening crude differentials in Canada

The forecast for January gas-weighted heating degree days breached the 1k mark for the first time, according to The Commodity Weather Group
- If this holds, it would be the coldest January in 11 years – insert long whistle
- Natural gas prices are up this morning, with the February contract higher by 13c to $3.58/MMbtu (8:10 AM CT)
- The EIA is expected to report a paltry 40 Bcf withdrawal from storage on Thursday, but the next three weeks after (which includes the current gas week) are all forecast to be between 210-270 Bcf draws
Lower 48 gas production remains near 100 Bcf/d as cold weather causes freez-offs
- Most of the decline in supply is coming from Appalachia, while the Permian is showing about 1.5 Bcf/d lower supply, according to data from S&P
- Cash Henry Hub prices remain near $4.00/MMbtu