Hard to believe but the Western Canada Select is now at US$20 barrel price for crude. This is now the lowest in more than two years.
Thanks to the rising productions from Canada’s oilsands. This production is way more than the nation’s pipeline capacity. While Canada is continuing with just a brutal rate of production, U.S. refinery capacity is still not able to carry out planned maintenance.
WCS is actually sending its discount to West Texas Intermediate Crude at an astonishing US$52 per barrel. WCS has declined for 10 out of the past 13 trading days, which has forced WCS to set the widest on record discount in Bloomberg. The last time it happened was way back in 2008. As they said, desperate times calls for desperate measures.
The situation kept getting worse when on Tuesday, a natural gas pipeline ruptured in British Columbia. This again forced the Washington oil refineries to curtain operations with the Canadian crude.