Hey Sharky,

Just would like to point out one thing. "He bought MRC as a hedge for oil price but despite oil has come down he can't benefit even when it was too high because he lost on MRC too."

The MRC was not really purchased as a hedge to high oil price, but more as protection between diluent and dilbit, which arguably it has accomplished. The MRC is only profitable when the crack spreads, difference between refined and crude, are wide. When oil price got really high this past summer the crack spreads were terrible. So to try to look at it from a positive angle, even the pure refining companies were having a tuff year, so we shouldn’t really beat ourselves up so much over MRC not performing.

Going forward, the MRC might provide us operating cash flow while Pod 1 is selling at a loss. My best guess is that crack spreads will widen a fair bit this winter. My reasoning is that with low oil prices the refiners can take a bit more profits without having to worry about demand destruction given the low crude price.

On an unrelated note, i am not very happy with DG's decision to suspend Algar's construction. Seems like a bad decision given that the money cannot be used for anything else and the interest payments are not exactly insignificant. Moreover, cost are coming down in Alberta, Shell just announced that they were going to revisit the oil sands.

http://www.bloomberg.com/apps/news?p...