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by Stockwatch Business Reporter

West Texas Intermediate crude for May delivery lost 25 cents to $85.41 on the New York Merc, while Brent for June lost 35 cents to $90.10 (all figures in this para U.S.). Western Canadian Select traded at a discount of $13.50 to WTI, up from a discount of $14.30. Natural gas for May lost eight cents to $1.69. The TSX energy index lost 5.00 points to close at 293.67.

Oil prices had a rocky day. Early in the session, they shot up by more than $1 (U.S.) as traders sifted through headlines about Iran's drone and missile attacks on Israel over the weekend. Prices then reversed course as the damage from the attack proved less than feared, easing worries about regional supply disruptions. Also weighing on prices today was a bearish report from the U.S. Energy Information Administration, estimating that domestic shale production (which makes up about three-quarters of total U.S. oil output) will rise in May to its highest level in six months.

Here in Canada, it was a quiet news day in the oil patch. Eyes are trained on Ottawa for the release of the federal budget tomorrow. Given the recent rally in oil prices, there is anxious speculation in some energy investment circles about the possibility of a windfall profits tax (perhaps explaining some of today's pessimistic trading activity). Temporary windfall taxes on energy producers were introduced in parts of Europe in 2022, and a Canadian survey last month found 62-per-cent for the idea here. Investors may wish to note, however, the commissioners of the survey, namely the David Suzuki Foundation and two other green groups. Also worth noting is that there was similar chatter about a Canadian energy windfall tax in 2022, and Prime Minister Justin Trudeau dismissed it as a "simplistic" idea that would likely do more harm than good.

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