• 4 minutes Permian in for Prosperous and Bright Future
  • 7 minutes Amount of Oil Usage in the United States
  • 10 minutes America Could Go Fully Electric Right Now
  • 6 hours Something wicked this way comes
  • 16 hours Tesla Battery Day (announcements on technology)
  • 6 hours Kalifornistan, CO2, clueless politicians, climate hustle
  • 2 hours JP Morgan Christyan Malek, report this Summer .. . We are at beginning of oil Super Cycle and will see $190 bbl Brent by 2025. LOL
  • 14 hours Natural Gas Saves Southern California From Blackouts
  • 10 hours Why NG falling n crude up?
  • 5 hours .
  • 4 hours Famine, Economic Collapse of China on the Horizon?
  • 2 days US after 4 more years of Trump?
  • 1 day Ten Years of Plunging Solar Prices
  • 2 days Top HHS official takes leave of absence after Facebook rant about CDC conspiracies
The World's Most Expensive Crudes Get Expensive Again

The World's Most Expensive Crudes Get Expensive Again

The world’s most expensive crude…

What BP Got Wrong About Global Oil Demand

What BP Got Wrong About Global Oil Demand

The recent BP Energy Outlook…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Alberta To Fight “Air Barrels” As Prices Continue To Plunge

Albertan oil producers need to become warier of overbooking already filled to capacity oil pipelines creating what’s commonly called “air barrels” as these contribute to the huge discount Canadian crude is trading at to WTI and other benchmarks. This is the message from Alberta’s Premier Rachel Notley, as reported by the Calgary Herald.

The oil industry in Alberta has been scrambling to find a way out of the discount that has eaten deeply into producers’ bottom lines. Since new pipelines are far from likely to come into operation in the foreseeable future, other options are being considered, including, most recently, deliberately cutting production, OPEC-style, to prop up prices.

Producers, however, are divided on this. While Cenovus is all for government-initiated cuts in production, Suncor, an equally large producer, is against it.

“We’re probably producing about 200,000 or 300,000 barrels per day of oil in excess of our ability to get that oil out of the province, either by pipelines or by rail,” Cenovus’ CEO Alex Pourbaix told Canadian media earlier this month.

On the other hand, “Our position is that government intervention in the market would send the wrong signals to the investment community regarding doing business in Alberta and Canada. And we really do need to take a long-term view and allow the market to operate as it should,” a Suncor spokeswoman said.

The provincial government, meanwhile, is considering closer scrutiny of pipeline and railway shipments in order to see which producers are guilty of creating “air barrels”. It could then hold them accountable. The problems with this approach are that it cannot be deployed immediately and that it will have a limited scope, as the provincial government could only give itself the powers to track shipments within Alberta itself.

While the industry and the government are trying to come up with some sort of solution to the price problem, Western Canadian Select was trading at US$15.20 a barrel at the time of writing, compared with US$56.96 a barrel for West Texas Intermediate.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News