Oilsands bitumen prices in disastrous territory, researcher calculates
A financial researcher says prices being paid for Western Canadian oilsands bitumen have depressed so distant that producers are losing income on each tub sole into a mark market.
Analyst Matt Murphy of Tudor, Pickering, Holt Co. says new headlines have been focused on a descending value of a Western Canada Select (WCS) price, though that magnitude is for a mix of heavy, gummy bitumen and a light oil indispensable to intermix it so it can upsurge in a pipeline.
The cost of WCS fell to about $19 US per tub on Thursday, about $52 per tub next a benchmark U.S. West Texas Intermediate price.
But Murphy says a condensate used to intermix a bitumen was offered for about $63 per tub during a same time and that means a bitumen partial of a WCS tub was indeed attractive between disastrous 11 cents and disastrous 28 cents per barrel.
It’s a initial time that has happened, he says, adding bitumen prices have always been in certain domain — even in early 2016, when U.S. oil prices fell next $30 per barrel.
He says he expects a disastrous pricing conditions to be short-lived, however, as direct will boost when U.S. refineries finish tumble upkeep and flourishing crude-by-rail ability will assistance move barrels to marketplace that can’t fit into Canada’s full pipelines.
Different forms of bitumen need incompatible amounts of diluent to upsurge in a pipeline, with a newest mining projects such as Suncor Energy Inc.’s Fort Hills cave requiring 10 to 25 per cent diluent and steam-driven projects that furnish from wells wanting 30 to 40 per cent diluent, he said.
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Article source: https://www.cbc.ca/news/canada/calgary/oilsands-bitumen-prices-negative-territory-1.4860884?cmp=rss