Tuesday , March 26 2019

Alberta output-cut mandate may be driving oil prices up

Bloomberg

Alberta’s plan to boost crude prices through mandatory production cuts is working a little too well. Just over a week after Premier Rachel Notley announced that oil producers will be required to curtail output by 8.7 percent, the price of heavy Canadian crude has more than do- ubled, in some ca-ses rendering Wes-tern Canadian Sel- ect too expensive to ship south to US Gulf Coast refiners.
Alberta’s heavy oil trades at about $41 a barrel, about $9 less than on the US Gulf Coast, according to traders and data compiled by Bloomberg. For a shipper without committed volumes, that price difference is so small that it wouldn’t cover the costs of shipping it down either TransCanada Corp’s Keystone pipeline to Houston or Enbridge Inc’s pipeline system. Gulf Coast imported about 500,000 barrels a day of Canadian crude in September. “Everyone is bidding up those barrels to make sure they can cover their pipe space,” Mike Walls, a Genscape
analyst, said by phone.

About Admin

Check Also

Enbridge pipeline delayed in hit to Canada oil sector

Bloomberg In a major blow to the Canadian oil industry, Enbridge Inc. now expects the ...

Leave a Reply

Your email address will not be published. Required fields are marked *