CALGARY – Oil from Western Canada is once again trading at a significant discount compared to global prices.
A Scotiabank report says the difference between the price of Western Canada Select (WCS) — an oilsands bitumen blend — and New York-traded West Texas Intermediate (WTI) has widened dramatically in October, to more than US$25 per barrel.
That’s the most significant price differential Canadian oil producers have had to contend with since 2018.
At that time, a lack of pipeline capacity from Canada led to depressed WCS prices and took a bite out of the sector’s profitability.
This time around, the factors weighing on Canadian crude have more to do with a series of unplanned refinery outages south of the border, which have lessened the demand for heavy oil.
Scotiabank says it expects to see continued weakness in heavy oil prices throughout the winter, though the situation should normalize in the latter half of 2023.
This report by The Canadian Press was first published Oct. 21, 2022.
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