Oil Sands Crude Prices Nosedive As Russian Bans Upend Market
(Bloomberg) -- Canadian heavy crude prices have collapsed as the European war upends global market flows and makes oil sands crude less valuable.Â
Western Canadian Select's discount to benchmark West Texas Intermediate grew $1.70 to $20.80 a barrel in Alberta on Friday, the widest in almost seven months, data compiled by Bloomberg show.Â
The growing discount has muted the benefits to oil sands producers such as MEG Energy Corp. and Cenovus Energy Inc. from the surge in benchmark oil prices above $100 a barrel. Soaring energy costs prompted the Biden administration to tap US strategic petroleum reserves, nearly all of which is similar in grade to oil sands crude. As many as 39 million barrels of these sour barrels will be released this summer, just as oil sands sites come out of maintenance.Â
At the same time, India and China are soaking up Russian oil as much of the rest of the world avoids doing business with Russia, closing the door to another potential market. Russian oil is available for as much as $40 under Brent, said trading sources. WCS for export out of the US Gulf Coast, where oil sands crude is sent on pipeline to gain access to global markets, is selling at a discount of around $9 a barrel to WTI, according to Link Data Services.Â
A glut of ultra-light oil is also contributing to the collapse. Oil buyers in Europe are replacing Russian Urals oil with lighter U.S. grades, which yield more naphtha and condensate. Condensate is blended with oil sands bitumen so it can flow through pipelines and makes up about a third of each barrel, lowering the overall price of the Canadian heavy crude.Â
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
-
Talking Points This Week: Leadership Shock At Nvidia, Earnings Strength, And The Fog Over Hormuz
The Anthropic IPO pricing and first trading day, Nvidia's upcoming earnings, and any fresh signals from Iran will set the tone for the following week.
-
Signature Play: The Classic Cocktail Is Dead. Or Is It?
Classic cocktails are disappearing from India's cocktail menus. But they're still being ordered, taught to bartenders and borrowed from. So, who's really having the last drink?
-
A New Samvat Wishlist: Inclusive Prosperity And Human Development
India has strengthened its economic foundations through infrastructure, digital access and enterprise. Its next growth chapter must deepen productivity, create better livelihoods and widen participation in prosperity.
-
Love, Sex Aur Dhokha: The Audacious Plot To Spy On Jensen Huang
A Taipei dinner, a Singapore chip buyer and a suspected Chinese asset: inside the alleged spy operation that got close to NVIDIA's Jensen Huang.
-
Ten Things I Learnt This Samvat
Patience can be a trap. Cheap stocks can stay cheap. Leverage can wipe you out. What did Samvat 2082 teach us? Niraj Shah writes on 10 lessons from the year gone by.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
