A promising market trend has emerged for Alberta’s oil industry as the difference in the price of a barrel of oil between Western Canadian Select and West Texas Intermediate is now less than $8 USD, the narrowest differential in years.
As of the end of trading Thursday, the price of West Texas Intermediate Crude ($52.59 USD) was $7.85 USD higher than the price of West Canadian Select Oil ($44.74 USD).
At one time in the fall of 2018, the price differential exceeded $52 USD a barrel and Premier Notley said the gap, attributed by her as an inability to build pipelines, was costing Canada more than $80 million per day.
The move towards a level playing field followed Alberta’s mandated production cuts to reduce a glut in supply.
Notley says the narrowing of the price gap has been positive but she expects there will be upcoming fluctuations in the market.
“We’re planning for a lot of volatility,” said Notley. “So much as we’ve seen short term god news in the bump in the Western Canadian Select, we also know it wouldn’t be responsible to assume that’s now the answer and that’s the new normal, because it’s not.”
The province says it’s continuing its efforts to secure additional rail capacity for crude to get it to more markets and to lobby for a greenlight for the Trans-Mountain Pipeline expansion.
With files from CTV’s Brad MacLeod
