The Harper government is lobbying heavily to have President Obama approve the Keystone XL pipeline that would carry 830,000 barrels per day of oil - sands bitumen to the vast refining complex on the U.S. Gulf and would ease the delivery bottlenecks that have driven down
Canadian crude prices.
Related: Lack Of Pipeline Capacity Could Force Down
Canadian Crude Prices
Scotiabank's Patricia Mohr agrees that projects like Seaway and Gulf Coast will help chip away at the discount, allowing Western
Canadian crude prices to float up to world levels.
Not exact matches
Crude oil
prices in
Canadian dollars for Brent (North Sea, UK), West Texas Intermediate (Cushing, OK, USA), and Edmonton Par.
The incident might result in restrictions on using rail to transport oil, which could increase the
price discount for
Canadian crude.
A year later, how are
Canadian oil and gas companies responding to the collapse in
crude oil
prices?
Business investment is inhibited by the low
prices for
Canadian crude and weak domestic demand.
With the widened spread in oil
prices between Edmonton and tidewater, however, rival customers from Washington, California and Asia are now fighting over the cheaper
Canadian crude.
If you match these volumes up with a comparison of landed costs of similar
crude import streams into the U.S. vs. the
prices of
Canadian crudes, you can get a sense for the foregone value.
When the spread between West Texas Intermediate
crude oil and Western
Canadian Select narrowed to US$ 10 a barrel last summer, some analysts declared that the big
price differentials were gone for good.
«With so much supply landlocked,
Canadian oil
prices are taking a serious hit,» Casey Research energy analyst Marin Katusa wrote in a late June investment note that estimated that Western
Canadian Select, a heavy
crude, was trading for a whopping US$ 23 less than WTI; a gap 30 % larger than the average differential between 2006 and 2010.
The
price gap between North American
crude and world
prices is a new and unfamiliar dynamic in international oil markets, and represents a «double whammy discount» for Western
Canadian producers, as Casey puts it.
Since last year, the near - term
price of WTI
crude, in
Canadian dollars, has dropped by almost $ 25 per barrel, and the long - term futures
price by $ 10, when you take into account futures market
prices for
Canadian dollars as well.
First, I want to look at how the changes not just in oil
prices, but also changes in diluent costs, discounts for oil sands
crude relative to light
crude and, in particular, the fall of the
Canadian dollar have changed the outlook for new oil sands projects — for those under construction, and for those currently operating.
This trend has reversed in recent weeks, with larger discounts applied to global and
Canadian heavy
crude leading to bitumen
prices remaining low while world oil
prices have gained some of the lost ground.
With approval of the Keystone Pipeline it could mean more
Canadian crude oil is coming to the U.S. CNBC's Jackie DeAngelis is in Nebraska, at the pipeline pumping station with a look at its impact on oil
prices and exports.
The pipeline or any other way to bring Western
Canadian Crude to Tex refiners would speed up oil extraction in Alberta and increase world supplies, which would bring down oil
prices for all Americans, by about a dollar a barrel according to Levi.
Meanwhile, pipeline bottlenecks are keeping western
Canadian crude trading at roughly half the world oil
price.
This, after a year of flatter growth and considerable volatility in the commodity markets, marked by continued discounts on
Canadian crude and low gas
prices.
Energy East will serve as a link between Eastern
Canadian refineries and the western
crude oil market, where
crude oil had been discounted significantly since mid-2010 until these
price differentials converged rapidly over the last couple of months.
Suncor said that while the discount
Canadian producers face nearly doubled in the first quarter compared with last year's quarter, it had no impact on the company's earnings or cash flow, as low
crude prices were offset by better midstream and downstream returns.
Today, a post has been making the rounds which claims that the Keystone XL pipeline would raise gas
prices in the US Midwest by, «20 to 40 cents per gallon, based on the $ 20 to $ 30 per barrel discount on
Canadian crude oil that Keystone XL developers seek to erase.»
The
crudest version of this story says that Ottawa should increase spending as a direct response to the fall in oil
prices and the resulting depreciation of the
Canadian dollar.
Eastern
Canadian consumers are now paying high Brent
prices for their gasoline, because our Alberta - Saskatchewan
crude only goes as far east as Sarnia.
The
price of Canada's oil sands
crude, Western
Canadian Select, trades at a discount to WTI.
The
price gap between
Canadian and world oil
prices has shrunk as more oil has been loaded on to train cars and smaller pipeline projects in the US have helped siphon off the backlog of
crude piling up in the Midwest.
«Extraction from the
Canadian oil sands continues to grow and with
crude oil
prices back above $ 70 (U.S.) a barrel, new greenfield projects and previously shelved expansions are once again starting to become viable,» wrote senior currency strategist Matthew Strauss.
Signs of global economic turmoil are being seen from falling stock market and
crude oil
prices to the weakest
Canadian dollar since 2004.
Earlier this year, for instance, Western
Canadian Select, the benchmark
price for bitumen from the oil sands, traded at nearly half the
price of Brent
crude.
Growth in
Canadian crude oil production has outpaced expansions in pipeline takeaway capacity and, along with past pipeline outages, has driven
Canadian crude oil
prices lower and increased
Canadian crude Continue Reading
Encana Corp. has so far avoided the pipeline bottlenecks that are damping
prices for Permian
crude and
Canadian natural gas, thanks to the company's hedging program and transportation agreements.
Meanwhile,
Canadian oil sits trapped in Alberta at a steep discount to global
crude prices.
Yet expectations for the company remain low overall due to delays in completing wells, low gas
prices, and a big discount in the
price of
Canadian crude.
Last week,
Canadian heavy
crude price differentials were weaker versus West Texas Intermediate.
The Western
Canadian Select
crude price traded around September WTI CMA minus $ 14.65 / bbl at the end of the week, a widening of the discount by $ 1.05 / bbl compared to the previous week.
«At the most basic level, this pipeline increases
prices realized by
Canadian producers, allows more
crude to flow by pipeline out of Western Canada, and consequently lowers the amount of
crude by rail which is a much less cost - effective and more polluting method of transport,» he said.
The lower relative
pricing for
Canadian crude is partly caused by pipeline capacity constraints as oil production rises in Canada
CEO Steve Williams said the loss of production and ongoing effects of deeper discounts paid for western
Canadian heavy
crude were offset by higher
prices for its offshore production, higher realized profit margins in its refining and marketing arms and lower feedstock costs.
WTI
crude oil
prices are gaining on Brent as strong U.S. demand and
Canadian pipeline issues tighten U.S. oil supply even further.
Oil
prices have collapsed, and the differential in
price between the WTI and Brent, which could have been a way for
Canadian oil producers to get a better
price on the international markets for their
crude, has shrunk to less than US$ 2.
The blowout in the
price spread between
Canadian heavy and U.S. light
crude isn't narrowing substantially any time soon.
After my post last night got me reading Budget 1980 and the National Energy Program, I stumbled upon something completely fascinating: the hated National Energy Program proposed an indexed
price for synthetic
crude from oil sands projects which, had it been followed until today, would have been above the
Canadian dollar
price of WTI in -LSB-...]
Commodity
prices have remained at historically elevated levels, although persistent transportation bottlenecks are leading to continued discounts for
Canadian heavy
crude oil.
Canada
Canadian stocks continued to grind towards a record high, rising for a 10th straight day as Western Canada Select
crude prices hit the highest level since 2014.
Crude oil
price gains pushed the Loonie around for yet another week, but the
Canadian currency also took some cues from positive remarks by BOC head Poloz.
The $ 10 rise in the
price of
crude oil between the 1st and 22nd of August strengthened the
Canadian dollar against the Greenback.
While the Euro dollar was facing the onslaught from sellers, the
Canadian dollar got a boost from the rise in
crude price to $ 54.30.
Meanwhile,
Canadian oil sits trapped in Alberta at a steep discount to global
crude prices.
A report from the nonpartisan Congressional Research Service noted that expanding access to
Canadian oil resources will not protect against volatile
crude oil
prices, which are impacted by international events:
TransCanada told Canada's National Energy Board that in the Midwest, its pipeline would «increase the
price of heavy
crude to the equivalent cost of imported
crude,» which would provide
Canadian oil companies with an added $ 2 - 3.9 billion in annual revenues.