Insight
Volatile Canadian crude prices - a growing challenge
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Report summary
For the second consecutive winter, volatile crude prices wreaked havoc on the Canadian upstream sector as transportation constraints impacted Canadian and North Dakota barrels travelling to southern demand centres. At times, Western Canadian Select (WCS) traded at as much as US$40/bbl below WTI. Following a similar price blowout in early-2012, we predicted that volatile Canadian prices were here to stay. The differential has since narrowed to US$25/bbl, as temporary pipeline issues have,
Table of contents
- Executive summary
-
Western Canadian prices slide
- Canadian price volatility struck last winter
- And returned in December 2012
- No relief in sight
-
Bitumen supply glut unavoidable
- Ramp-up of onstream projects adds substantial volumes
- Sanctioned projects to add nearly 400,000 b/d of additional bitumen production by 2015
- Bitumen project breakevens attractive under a point-forward view
- But unsanctioned projects at risk
- North Dakota Bakken getting bigger and bigger
-
Infrastructure problems will persist
- Projects along traditional export route to US Midwest and further south offer quick wins
- Options to West and East coasts are strong contenders
- Pony Express go-ahead key to increasing throughput via US Rockies
- Might rail fill the gap?
-
Companies with downstream assets best suited to weather the storm
- Appendix
Tables and charts
This report includes 11 images and tables including:
- Potential bitumen production growth between 2012 and 2020 by company
- WCS plummeted 35% between Sep and Dec 2012
- WCS-WTI differential widened from $10 to over $30/bbl
- Bitumen supply growth - mostly sanctioned projects
- SCO production to benefit from debottlenecking work
- Bitumen projects by point-forward B/E @40% discount
- Bitumen projects by point-forward B/E @50% discount
- Where will the market access growth come from?
- Map: Critical export routes south and the key sources of North American crude production growth
- Clearance on existing routes quickly erodes
- Market access growth - detailed list of critical projects
What's included
This report contains:
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