Posted on 11/13/2018 9:07:17 AM PST by bananaman22
Canadian oil prices briefly plunged as low as $15 per barrel last week, after a U.S. federal judge blocked the construction of the Keystone XL pipeline.
Canada’s oil industry has lurched from pipeline crisis to pipeline crisis, with projects blocked at every turn. Just a few months ago, the Trans Mountain expansion – a proposed pipeline to be built from Alberta to the Pacific Coast – also ran into trouble and is now ultimately in doubt.
The inability to build new capacity capable of shipping higher levels of oil out of Alberta has crushed Western Canada Select (WCS), a price marker that tracks heavy oil from Canada. WCS has historically traded at a discount relative to WTI, taking into account differences in quality and the higher cost of transit, but the discount has exploded this year as Alberta’s pipelines are tapped out. In October, WCS traded at a record $50-per-barrel discount to WTI.
(Excerpt) Read more at oilprice.com ...
why is gas still above $3 a gallon where I live.....
Not only would they lose money to produce and ship it.... eventually they would have to begin doing write-downs on the value of their reserves.
Hitting $1.99 in some areas in Bama, though avg is $2.38.
I can see the refinery from here, and the oil is coming from Canada.
Something is rotten in Washington.
We (Canada) are impoverishing ourselves. Our oil sells at massive discounts because of lack of means to move it. Our leader needs to get his act together and do something.
Yet gasoline is $1.399 CDN / litre. 5 years ago the price of oil per barrel in US dollars was the price of a litre of gasoline in Cdn cents.
Some things make you go: HMMM.
Better find a replacement source of heavy oil for the U.S. Refineries engineered for such. As the Venezuelan output sank, the Canadian oil has till now replaced that supply shortfall.
If in reference to Alberta, aren’t the other provinces dependent on taxing the petroleum trade for their budget?
Break even is about $40 a barrel. Need $50 oil long term.
For those not aware Canada operates on a system of provincial welfare. We call it transfer payments. A normal country, where economics contract in one region expect workers to move to another region. Not in Canada. We categorize provinces as “have” and “Have not”. The Have provinces contribute billions to the have nots in a complicated formula.
So when BC asks how Quebec can afford $10 a day daycare the answer is transfer payments from other provinces. BC runs a fairly conservative tight budget. While Quebec is completely out of control - because they will be bailed out.
A large part of Alberta’s budget revenue, as you suggested, is oil royalties.
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