I was watching BNN and this came up...
To Blame this situation on PM Harper and his crew... is absurd... as is blaming the price of gasoline on the federal gov.
It is akin to consumers expecting the federal gov. to step in and lower the price of Canola... after a drought... our market economy would be in a shambles and economy in ruins if politicians were responsible for rolling back or increasing prices of certain important commodities.
DTN has a good explanation of what cause and effect these oil prices have in a historical context:
In Part, DTN Cliff Jamieson article:
"Thursday 8/13/15
Canadian Heavy Oil Trades Under $30/barrel
The September West Texas Intermediate contract reached levels below its March low of $42.03/barrel on its continuous chart this session by dipping as low as $41.91/barrel. Canadian producers of Western Canadian Select heavy crude are facing a double whammy, with the discount from WTI reaching its largest level in over a year. ....
The double whammy faced by Canadian producers is the growing discount for heavy Western Canada Select (WCS) oil, which is trading at its highest discount in over a year. As indicated on the attached chart, the WCS spread or discount is trading at $19.90/barrel USD. This spread has narrowed from $39.90/barrel the week of Nov. 4, 2013 to a low of $7.50/barrel for the week of June 8 2015, while has since weakened 165% to $19.90/barrel, retracing 38.2% of the mentioned uptrend to the largest discount faced in a year. This is noted by the blue line in the middle study.
The lower study indicates the Canadian dollar value of the Western Canada Select oil at $29.18/barrel when valued in Canadian dollars. To put this into perspective, today's Financial Post Energy column is titled In Alberta, 30 loonies will get you a case of beer, a bottle of whiskey -- and now a barrel of oil. This price has not been seen since 2008/2009.
There is a long list of reasons for this growing spread between Canada's heavy crude and the already weak WTI prices, which includes increased production after shut-downs related to Alberta's fires, new production coming on-line, pipelines shut down due to spills and a sharply reduced production at a key Indiana refinery.
Watch for oil to continue to test the $42.03 March low, while a breach of the WCS spread at $19.88 could result in a further move to the 50% retracement of $23.70/barrel. Further weakness in WTI or the WCS spread could have negative implications for the Canadian dollar which will help mitigate the damage, but will present further challenges for the industry and overall economy."
Cliff Jamieson can be reached at cliff.jamieson@dtn.com
Follow Cliff Jamieson on Twitter @CliffJamieson
To Blame this situation on PM Harper and his crew... is absurd... as is blaming the price of gasoline on the federal gov.
It is akin to consumers expecting the federal gov. to step in and lower the price of Canola... after a drought... our market economy would be in a shambles and economy in ruins if politicians were responsible for rolling back or increasing prices of certain important commodities.
DTN has a good explanation of what cause and effect these oil prices have in a historical context:
In Part, DTN Cliff Jamieson article:
"Thursday 8/13/15
Canadian Heavy Oil Trades Under $30/barrel
The September West Texas Intermediate contract reached levels below its March low of $42.03/barrel on its continuous chart this session by dipping as low as $41.91/barrel. Canadian producers of Western Canadian Select heavy crude are facing a double whammy, with the discount from WTI reaching its largest level in over a year. ....
The double whammy faced by Canadian producers is the growing discount for heavy Western Canada Select (WCS) oil, which is trading at its highest discount in over a year. As indicated on the attached chart, the WCS spread or discount is trading at $19.90/barrel USD. This spread has narrowed from $39.90/barrel the week of Nov. 4, 2013 to a low of $7.50/barrel for the week of June 8 2015, while has since weakened 165% to $19.90/barrel, retracing 38.2% of the mentioned uptrend to the largest discount faced in a year. This is noted by the blue line in the middle study.
The lower study indicates the Canadian dollar value of the Western Canada Select oil at $29.18/barrel when valued in Canadian dollars. To put this into perspective, today's Financial Post Energy column is titled In Alberta, 30 loonies will get you a case of beer, a bottle of whiskey -- and now a barrel of oil. This price has not been seen since 2008/2009.
There is a long list of reasons for this growing spread between Canada's heavy crude and the already weak WTI prices, which includes increased production after shut-downs related to Alberta's fires, new production coming on-line, pipelines shut down due to spills and a sharply reduced production at a key Indiana refinery.
Watch for oil to continue to test the $42.03 March low, while a breach of the WCS spread at $19.88 could result in a further move to the 50% retracement of $23.70/barrel. Further weakness in WTI or the WCS spread could have negative implications for the Canadian dollar which will help mitigate the damage, but will present further challenges for the industry and overall economy."
Cliff Jamieson can be reached at cliff.jamieson@dtn.com
Follow Cliff Jamieson on Twitter @CliffJamieson
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