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Brent Soars As Canadian Crude Crashes

Pipeline

Friday December 15, 2017

In the latest edition of the Numbers Report, we’ll take a look at some of the most interesting figures put out this week in the energy sector. Each week we’ll dig into some data and provide a bit of explanation on what drives the numbers.

Let’s take a look.

1. Forties outage blows open Brent-WTI spread

(Click to enlarge)

- The outage at the Forties pipeline system took 450,000 bpd of supply offline for several weeks. North Sea oil fields have had to shut down because of the outage.
- The unexpected disruption led to a spike in the price of Brent relative to WTI. The differential had already widened in recent months, but quickly added more than $2 per barrel after the outage of Forties.
- At over $7.25 per barrel, the Brent-WTI spread for delivery in February 2018 is at its widest in years.
- That should narrow when the pipeline comes back online, but it will juice U.S. crude exports because American oil is now dramatically cheaper than elsewhere in the world.

2. Canadian oil prices plunge

(Click to enlarge)

- The price differential between Brent and WTI widened because of the Forties outage, but pipeline issues are causing even more problems for Canadian oil.
- Western Canada Select, which tracks heavy oil from Alberta’s oil sands, is now trading at a $25-per-barrel discount relative to WTI, the steepest discount in four years.
- The outage…

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