• 3 minutes Boris Johnson taken decision about 5G Huawei ban by delay (fait accompli method)
  • 6 minutes This Battery Uses Up CO2 to Create Energy
  • 13 minutes Shale Oil Fiasco
  • 3 mins Historian Slams Greta. I Don't See Her in Beijing or Delhi.
  • 33 mins We're freezing! Isn't it great? The carbon tax must be working!
  • 12 hours Indonesia Stands Up to China. Will Japan Help?
  • 2 hours US (provocations and tech containment) and Chinese ( restraint and long game) strategies in hegemony conflict
  • 21 mins Don't sneeze. Coronavirus is a threat to oil markets and global economies
  • 4 hours Might be Time for NG Producers to Find New Career
  • 24 mins Beijing Must Face Reality That Taiwan is Independent
  • 13 hours Tesla Will ‘Disappear’ Or ‘Lose 80%’ Of Its Value
  • 17 hours Environmentalists demand oil and gas companies *IN THE USA AND CANADA* reduce emissions to address climate change
  • 2 days Phase One trade deal, for China it is all about technology war
  • 1 day Anti-Macron Protesters Cut Power Lines, Oil Refineries Already Joined Transport Workers as France Anti-Macron Strikes Hit France Hard
  • 1 day Angela Merkel take notice. Russia cut off Belarus oil supply because they would not do as Russia demanded
  • 1 day China's Economy and Subsequent Energy Demand To Decelerate Sharply Through 2024
Oil Bears Are Back As Demand Fears Go Viral

Oil Bears Are Back As Demand Fears Go Viral

Demand fears, largely driven by…

This Emerging Oil Hotspot Threatens The OPEC Deal

This Emerging Oil Hotspot Threatens The OPEC Deal

Guyana has exported its first…

WCS Prices Jump As Canadian Wildfires Threaten Heavy Oil Supply

Wildfires

Wildfires in Canada are sending Canadian oil prices higher as a second oil producer is forced to shut-in production, with Cenovus Energy joining Canadian Natural Resources in halting operations due to safety concerns, according to World Oil.

Over the past year, Canada’s oil industry has suffered under the weight of its deeply discounted benchmark crude oil, Western Canadian Select. The painful discount, worsened by Canada’s provincial bickering over oil flows and pipeline projects, pressured oil-rich Alberta last year curtail oil production in an effort to shore up the discount. It worked.

In October 2018, the WCS discount was over $60.

That discount fell to just $15 last week, and is now looking to shrink even further thanks to the wildfire.

The wildfires bring back painful memories of wildfires ripping through Alberta in 2016, crippling multiple producers and shutting in hundreds of thousands of barrels of production. The total estimated cost of those fires were $1 billion. The wildfire damage was so far reaching, that it affected global oil prices as well.

The latest wildfire has so far claimed just the two producers. The first of which is Canadian Natural Resources LTD (NYSE: CNQ), which has seen a drop in stock price of 1.44% to trade at $26.60. Cenovus Energy Inc. (NYSE: CVE) was trading down 1.71% at $8.06.

Canadian Natural Resources have stopped 65,000 barrels daily of heavy crude oil—a resource that at the moment is already constrained as Venezuela’s crude oil production—which is of the heavy variety—has dropped to new lows. Iran’s oil too—also heavy—is also being restricted.

US Gulf refineries are configured to process his heavy crude oil, which is becoming increasingly difficult (or increasingly expensive) to find, and driving season is now underway. Most refineries ramp up production for driving season, but the global shortage of heavy crude oil—made worse by the wildfires—will surely cut into refinery margins.

By Julianne Geiger for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage


Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play