As the biggest Canadian oil producers reported Q3 earnings in the past two weeks, analysts were more interested in the companies’ expectations about takeaway capacity rather than earnings, due to the record-wide price differential of Canada’s heavy oil to WTI.
Acknowledging that the record low prices of Western Canadian Select (WCS)—the benchmark price of oil from Canada’s oil sands delivered at Hardisty, Alberta—is an anomaly on the market, many of the biggest oil producers in Canada expect some relief to come in the short term with U.S. refineries returning from maintenance this quarter and with crude-by-rail shipments to the U.S. continuing to set new records in the coming months.
Due to the record low heavy oil prices, Cenovus Energy, for example, is currently operating its Foster Creek and Christina Lake projects at reduced volumes. On the earnings call, Cenovus Energy’s President and CEO Alex Pourbaix urged the Canadian industry to slow down production to ease bottlenecks.
“And I want to be clear on this, the industry right now has a production problem. We’re going to do our part but we are not going to carry the industry on our back. I think this is something that has to be dealt…