Matthew Lekushoff |

Despite significant volatility, most global markets remain close to their trading levels of two weeks ago----- except for oil prices. At one point this week, West Texas Intermediate crude had fallen 7.9%, to $55.19 a barrel (just over $57 as of this writing), marking an 11-month low.

The situation is bleaker for Canadian energy producers. As mentioned in a previous letter, Western Canadian Select (WCS) now sells at a huge discount compared to oil sold on the international market, largely due to lack of pipeline capacity. Simply put, the current supply of WCS oil can't be shipped from western Canada to markets in the U.S. and around the world.

In an attempt to improve the situation, a record amount of oil is now being shipped by rail. While this has slightly relieved the industry, WCS still plunged as low as $15 a barrel last week. It's estimated the difference in price may cost producers up to $100 billion, as well as billions in lost tax dollars to provincial and federal governments.

Fortunately, there is somewhat better news on the horizon. U.S. refineries are expected to complete their seasonal maintenance in coming weeks. Rail supply is expected to increase, potentially reaching 300,000 bbl/day by the end of 2018 (Augusts saw a record 230,000 bbl/day), and 400,000 bbl/day by the end of 2019.  Also, Enbridge's Line 3 pipeline project, with the ability to increase supply by about 380,000 bbl/day, should be completed late next year. 

Although this will clearly help, most industry experts agree the only way to fully close the gap between WCS oil and the global price is to build another pipeline. Odds are you'll hear more about this in the coming months.


Clan of the Cave Bear  by Jean M. Auel: Clan of the Cave Bear is a work of pre-historic fiction chronicling a Neanderthal tribe that adopts a unique member. Although its forced to make educated guesses regarding Neanderthal culture, language, and rituals, it's evident that a great deal of research was undertaken. I enjoyed Clan of the Cave Bear and plan on reading the next book in the six-part series dubbed  Earth's Children.
The Surprising Power of the Long Game by Farnam Street: People in great shape eat well and work out regularly, even when they don't feel like it. Perhaps less obvious is that a long-term approach can be applied to most every part of your life, from your investments to relationships to learning to playing an instrument. Taking the long approach is sometimes not the most fun approach, but it's quite often one of the best strategies. Or, as  Naval Ravikant says , "Play iterated games. All the returns in life, whether in wealth, relationships, or knowledge, come from compound interest."
I Can't  by Rob Jones: If you know people who regularly say, "I can't," please send them this article.
The Minimalists  on the Kevin Rose Show: Many of us crave  the latest and greatest technology, TV show, homes, cars, etc. The Minimalists, Joshua Fields Millburn and Ryan Nicodemus, decided this behaviour was ruining their lives and chose to live differently. This podcast is an introduction to their philosophy, which isn't quite as draconian as you may think.
Is Life Improving? Documenting the Remarkable Progress of Humankind  by Laurence B. Siegel: One of my biggest pet peeves is hearing people say the world is worse than it has ever been. This article clears a few things up in that regard.
Conversations with Tyler with Kareem Abdul-Jabbar   by Tyler Cowen: Ever since learning about legendary basketball coach John Wooden, whom he played for, I've wanted to learn more about NBA Hall-of-Famer Kareem Abdul-Jabbar. This interview gives a nice introduction into his playing career, but also his writing, political philosophy, and other interests. 
The Major Pitfalls Faced by Young Entrepreneurs  by Visual Capitalist: A list of the biggest challenges the next generation of entrepreneurs will face.


"Anyone who isn't embarrassed of who they were last year probably isn't learning enough." - Alain de Botton
"We all are learning, modifying, or destroying ideas all the time. Rapid destruction of your ideas when the time is right is one of the most valuable qualities you can acquire. You must force yourself to consider arguments on the other side." - Charlie Munger

  • Earlier this week, comic book pioneer Stan Lee passed away. As a huge comic book fan myself, the magnitude of his achievements in pop culture can't be overestimated. 

Matthew Lekushoff

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