Zachariah Loney

🇨🇦🛢️😱 Western Canadian Select crude differentials continue to get crushed, now $31/bbl below WTI in Hardisty, Alberta. That's tied for the widest spread in late-2022, and before that the late-2018 diff blowout that forced production curtailment in early 2019. But this time it isn't pipeline capacity shortages—the transportation proxy (far right chart) is completely line. This rout is being entirely driven by the diff at Houston, now at an all-time high of >$23/bbl. That normally means an issue with light-heavy quality, which is partly to blame here. But this time it's much more driven by our record-high tanker rate environment. Canadian heavy crude *re*exports out of the US Gulf Coast have historically gone as far as India, which is an exceptionally expensive trip (~10x normal) atm. Combine that with additional Venezuelan crude availability this year and you need to heavily discount your barrel to get someone to bite, and it's this small pool of marginal barrels that are dragging down the entire Western Canadian pricing complex. The brutal irony is that just at the moment Canada is finally diversifying exports to Asia that the long trip to Asia becomes a serious pricing vulnerability in this spiked tanker market. Tanker rates have also widened the spread between WTI and Brent, so WCS gets the double-whammy of the compounding diffs.

BREAKING: Russia declares it is ready to supply unlimited diesel to the United States under Trump's deal with Putin. "As much as our partners want, frankly, from the volume that we will supply for export. We can supply everything," Deputy Prime Minister Novak says. The first 3 tankers are already crossing the Atlantic. Each carries 300,000 barrels of ultra-low-sulfur diesel, loaded at Primorsk on October 22 and due in New York around November 7. That is 900,000 barrels, just 5 hours of American diesel use.

More $HG.CN $HGRAF $HG analysis Its been fun to look back at my old posts to see what I was thinking and where I was wrong and where I was right Back on April 2nd I pointed at the bearish divergence on the weekly chart (see quoted post below), price made a higher high when we ran to 11, but momentum did not. That meant that momentum was already slowing down and chances for momentum reversing were increasing. I understood that, pointed it out. But I did underestimate how long it would take for momentum to reset. For circle #3 I was prepared for price to either backtest or reclaim the weekly channel and keep trending higher. We got rejected, and as the daily cycle started getting mature I jumped out at 5.90 as I realized there was too little time to reclaim the rising channel in that daily cycle. At that time the smaller cycles within the daily cycle kept failing (breaking lower instead of holding), and we never got the regular 4th 4hr cycle bounce we usually get. I took this as a warning of weakness, which I pointed out many times in my Substack Hydrograph chat, and I stayed on the sidelines. This bearish behavior of failing the small cycles was a great indicator of the imminent selling pressure brewing, and it started in the 6.00 CAD range. Now there is a lot of pessimism and rationalization around the company, lots of retail investors have been panic dumping their shares with market orders, all while in reality, there has been no material negative news from the company, and structurally, HG is in a better place than they have ever been in. On top of that weekly RSI (a popular momentum indicator) is at the lowest level it has been since the stock was at 0.05! Let that sink in. We are likely making a very significant low here. I am ignoring the doomsayers, who are always out and about just like the pumpers are when we are at the highs. I think we could see a face ripping rally here shortly which will trap a lot of people out who panic sold recently. I've been looking for a re-entry point myself. Also, we are on day 104 of this daily cycle, VERY late relative to the average daily cycle, and we are on week 68 of the weekly cycle, which is very late relative to HG's average, too. We are due for a major bounce soon in my opinion. If you feel that you would benefit from extra guidance and a solid community of sane HG investors (unlike the dumpster fire in the CEO forum - sorry guys), you are welcome to join the Substack group. There is a growing community there and a lot of valuable information, regular updates for what I am doing personally as well as T.A. updates.

BREAKING: The Qatari delegation has just left Tehran after only 30 minutes, shorter than planned, after no progress was made on US-Iran talks. Pakistan's Army Chief Asim Munir is now also leaving after Ghalibaf told him "we have nothing new to say."