PROCESSWEST Magazine Online

Canadian crude hits widest discount mark

May 22, 2019   Don Horne




Heavy Canadian crude’s discount to the U.S. benchmark blend expanded to the widest this year as Alberta increases output limits and oil-sands producers forge ahead with new projects.

Western Canadian Select traded at $15.75 less per barrel than West Texas Intermediate on Tuesday, the widest discount since Dec. 31, according to Bloomberg News. The differential had been as narrow as $6.95 a barrel in January.

The discount is widening after Alberta increased the amount it’s allowing drillers to produce, easing an unprecedented curtailment program put in place last year amid a collapse in local crude prices. The limit was set at 3.71 million barrels a day for June, up 150,000 barrels from when the curtailment was enacted.

Oil-sands producers including Canadian Natural Resources Ltd., Cenovus Energy Inc. and Imperial Oil Ltd. also are pushing ahead with expansions, while new export pipeline projects such as Enbridge Inc.’s Line 3 expansion have faced further delays.

Advertisment

The widening discount has a silver lining in that it makes Canadian crude more economical to move to refineries by rail, a more expensive transport option that has become increasingly important as Alberta’s pipelines remain overwhelmed.

(Bloomberg News)


Print this page

Related Stories

Leave a Reply

Your email address will not be published. Required fields are marked *

*