Canadian oil producers are once again suffering from a steep discount for their oil, causing the largest spread between Canadian oil and WTI in years.
Western Canada Select (WCS) recently fell below $40 per barrel, dropping to as low as $38 per barrel on Tuesday. That put it roughly $31 per barrel below WTI, the largest discount since 2013.
The sharp decline in WCS prices is a reflection of a shortage of pipeline capacity. Much of the talk about pipeline bottlenecks these days focuses on the Permian basin, and the unfolding slowdown in shale drilling, which could curtail U.S. oil production growth. But Canada’s oil industry was contending with an inability to build new pipeline infrastructure long before Texas shale drillers.
But it’s all worth it if we can lower CO2 emissions by 0000000%. Right??
It’ll be worth it for Juthtin and Buttshead if western Canada takes its rightful place in Confederation by having to survive by scrounging for roots and berries, thereby fulfilling PET’s dream.
Scrounging for roots and berries, Ha.
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I hope you have plenty of mushrooms, I like Mushrooms.
These California wildfires have used up about 3 trillion dollars in Carbon credits.
But the VISIBLE “particulate matter” of these fires aren’t the dangerous ones. Noooooo … it’s the invisible micro particulate matter that is Killing all of us in massive numbers! Did you KNOW that MILLIONS of people DIE every DAY on our planet? As the earth has gotten hotter … MORE people have DIED than ever before in history!!!
/sarc. for the data challenged D- science students.
The difference is the Permian shortage of pipeline will be resolved within 2 years whereas in Canada, the anti-industrial revolution and their political pimps have stalled all new Oil and Gas egress and we will be no further ahead than we are now.
Yet we’re still paying $1.46/liter because…?
Because refined products can cross the border in either direction but since Canadian refiners can’t supply all of Canada, they get US wholesale prices (plus Canadian taxes) or they would export more. If you want cheaper gas at the pumps try to convince someone to over-supply us with refineries.
Actually, Canada is a net exporter of refined products.
John would have a point if (say) Ontario was a net importer as (is often the case) product is exported where an over-supply exists (Alberta) but imported where an under-supply exists (Ontario and Quebec, Canada’s 2 largest provinces by population).
This is why Canada imports oil on its east coast and sends cheap unprocessed oil to the US from Alberta. It’s the cheapest solution to supplying oil and oil products to the country without the hassle of having to build pipelines and refineries (and dealing with governments, First Nations and NGOs).
Why would oil companies try and “help” Canadians by building more infrastructure to lower prices?
I guess there’s no point in trying to explain economics to a “naysayer” is there? But here goes! Oil cos want a pipeline so that they can get a better price for their oil. If they can get market prices for crude, there’s about $30/bl more for them. Consumers gain because there’s more economic activity and profits being generated right here in River City! Get it? Everybody is better off and money does not go to support crazy third world regimes who oppose our way of life!!
Seems pretty simple when you apply a bit of logic and reason to the problem.
Meanwhile Jagmeet Singh wants Canada to buy oil from those bastions of environmental responsibility and human rights: Venezuela, Nigeria, and Algeria.
We must help spread lefist joy.
Does this mean that Heinrich Himmler Butts can control the climate through taxation now or will he have to impose more taxation? Is El Gropo still on vacay or is he acting in front of his adoring Media fans again.
https://pm.gc.ca/eng/news/itineraries
Surprise: He’s travelling in K-Bec. Very important stuff. The branding continues …
Speaking of groping, funny how fast that got shut down.
Maybe it WAS butts who wrote the Leap Manifesto.
https://leapmanifesto.org/en/the-leap-manifesto/
One of the keys to an independent nation is energy independence. I would say that its also a matter of national security but then so are military capabilities. This government’s aim seems to be to weaken Canada, to turn it into some type of UN experiment of post-nationalism.
Our fates and our fortune rests in the hands of people who many ignorant and weak Canadians dismiss and dislike. Ironic and bizarre and totally incoherent. Their view of the world isn’t naïve, its unreal.
Yes, their worldviews are unreal, but like the imams of the Islamic world, they don’t do the dying, just the preaching, and like the Islamic believers, Canadians don’t seem to notice the incongruity, and yield themselves up as slaves and martyrs to the utterances of Gerald’s Butt.
In other words, when the politicians increase our taxes they give themselves a raise.
It’s a good thing we already have a cross country rail road because I guarantee we couldn’t get one built today.
You cultists bug me.
A national broadcaster never was a good idea.
A national oil company never was a good idea.
A national railroad never was a good idea.
How is that national government thing working out for ya?
How is that national healthcare working out for ya? Been waiting long?
How is that national charter of rights working out for your bakery? You get that summer jobs grant?
You able to get that pipeline built?
You able to get your beer from the next province over?
If only you get the correct people elected, all this could never happen again. Riiiiiight.
Who said anything about a “national” rail road. I said a cross country rail road and I repeat, we couldn’t get one built today. As for cultists? WTF are you talking about?
For future reference, anything that they told you in school was a good thing and necessary for the country, is 99% certain to be BS.
“It’s a good thing we already have a cross country rail road because I guarantee we couldn’t get one built today.”
Plus, we soon won’t even be allowed to utter the name of the PM who was behind the building of that railroad.
The CEO of Cenovus said the other day that the current 200,000 boe/d being shipped by rail will increase to 500,000 by the end of 2019. Along Hwy 3 between Moyie and Yahk CPR is building a mile long spur as the rail traffic crossing at Kingsgate is ramping up.
I suspect WTI will drop below $60 and oil stocks will drop accordingly. Investors should be starting to overweight Canadian energy as it is cheap. Enter a position and go to overweight when WTI drops to $58. We can be confident that Saudi Arabia, ya that POS country, will eventually cause a major war in the ME. Good on them.
Make no mistake – what is going in Canada has much more to do with keeping Western Provinces in their proper position than the climate .
The last paragraph in the oilprice.com article has this to say about Trans Mountain (which Canadian taxpayers now own courtesy of our brilliant, strategic PM):
“But on that front as well, Ottawa continues to receive bad news, following its desperate bid to take over the project. The Canadian Press reported on August 7 that expanding the project will cost $1.9 billion more than previously thought, and will take a year longer than expected, putting the start date off until late 2021.”
As for delays and increased costs, I’d bet that this is just for starters.
Don’t forget that the Sockmonkey does not want to have to enforce the law and remove those protesters.
Its really hard to virtue signal being all about human rights and trashing the Saudi’s when the media is transmitting video of the RCMP hauling away protesters and having an all out riot at the tent city.
Not that I’m an economic naysayer but here goes. Oil companies are in the business of selling oil. If they have to construct infrastructure to do that they will. But they don’t do it (build infrastructure) in the best interests of consumers. Oil companies in Alberta already get market prices for their crude. It’s just that the market in Alberta is not the market in West Texas. To get Alberta crude to West Texas costs money and Alberta crude is competing against other crude for the same refineries. The market price in Alberta is what the Americans are willing to pay.
If Alberta is able to construct a pipeline to the West Coast they could sell their oil to China and Japan. This would create a new market price (Canada West Coast Select) that would pay somewhere between what Alberta gets now and what others are charging China and Japan. That is the way economics works.
Regarding refineries and shipping oil from Alberta to the east coast, this is a more complex problem. Why would the refineries in eastern Canada want Alberta crude when they already have American and Saudi crude supplies and existing infrastructure. By limiting the infrastructure in Ontario and Quebec the price of refined product remains high.
The largest refinery in Canada is in New Brunswick, owned by Irving Oil at 300,000 bbl/day. It features a deep water port that accepts super tanker deliveries literally to its front door. Why would this refinery want to see an east cost pipeline when it already has the perfect infrastructure for its raw material. Who would want to pay for such infrastructure to compete against these international super tankers?
The problem with the oil industry in Canada is essentially the problem of Alberta and its one market, the USA. Alberta needs to see a pipeline to the West Coast to reach new markets if it ever wants to expand production or get a better price. But don’t look to the oil companies to invest in infrastructure to lower the price of petroleum products. That is not an economical reality.
Let me add that the oil companies have become … “partners in spreading global warming alarm” … because the hysteria has made their product more scarce, more expensive, and yet STILL now and forever in HIGH DEMAND. The net impact of environmental regulations on oil is … HIGHER windfall PROFITS. Why should the oil companies care when the marketplace is being artificially manipulated in their favor.
No … the oil companies are not your friends. They LOVED $5.00/gal. gasoline … and cannot WAIT for it to return (hint: coming soon).
Why doesn’t Suncor buy enough mothballed Gulf Coast refineries to use their total production? They would suffer zero discount. They are big in retail so even buy a chain of gas stations to use it up.
The other day while on my way for a day trip to Banff I saw a car driven by an old white guy with a white neatly combed beard with a CALIFORNIA license plate that said “TREATY7”. I don’t know if the guy was an environmental activist, a lawyer, both or whatever. He certainly fit the stereotypical look and could have been visiting from a leftist hotbed like SanFran for all I know. Seeing a car more than 1000 miles away from its home state driving around southern Alberta within Treaty 7 boundaries with a personalized license plate like that has significance. There is real foreign funded collusion going on inside Canada using group identity politics against our nation and its industries resulting in huge economic harm. Now it seems that the names of the legal tools being used by groups to drive spikes into Canadian business are seen fit for personalized license plates in far-flung locales where people have possibly been dramatically enriched from such devious unCanadian schemes. Certainly I could be wrong about my interpretation on what I saw but there’s so much negative that’s happened from well-organized opponents with respect to projects like Kinder-Morgan, Northern Gateway, Energy East and Petronas’ Kitimat LNG that seeing a Californian driving around with a TREATY7 license plate seems like I just got served a pie in the face.
What a sad, pathetic, story. Sadly, Canada has been invaded by the hysterical anti-oil Enviro-wackos from my home state. Our country is filled with obscenely high paid eco-lawyers working for environmental “non-profits” who actually get PAID by the TAXPAYER in accordance with environmental laws. These men pull down salaries in the $300-400k neighborhood. What the “non-profits” get from these lawyers are multiple lawsuits challenging nearly every project in America. It is soooo counterproductive. It’s amazing anything gets built at all.