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Western Canadian oil pricing

A lot of discussion happening about pipelines, market access and crude differentials these days.  I’ve started using this map as a means of illustrating the various levels to this debate.  First, it’s important to always note that all oil is not equal – if you’re looking at a WTI-WCS differential and getting really upset about it, keep in mind that you’re conflating heavy crude in Alberta with light crude in Oklahoma – there are pricing differences due to location and quality involved.  It’s generally more useful to look at apples-to-apples comparisons, and for that a Maya-WCS differential is very useful.  Today, Maya is trading at almost $25 per barrel above WCS based (almost entirely) on geography.  Pipeline tolls to the Gulf Coast are less than $10 per barrel and so, if efficient infrastructure were in place, we could expect to see at least $15 more per barrel for our product today than we are currently receiving.  That hurts.

One response to “Western Canadian oil pricing”

  1. Duncan Noble

    Interesting. How much of Western Canadian production of roughly 4.2 million bbls/day is subject to this discount? Is it some portion of the roughly 50% of Western Canadian production that is “heavy”? Thanks!

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