Discount to West Texas Intermediate hits biggest level since late 2013.
Canada is deprived of billions of dollars every year because of how much cheaper Canadian crude oil is compared to West Texas Intermediate.
According to Bloomberg, the gap in price (also referred to as the ‘discount’) has reached the largest level since December of 2013.
A report notes “Prices dropped a day after Suncor Energy Inc.’s Chief Executive Officer Steve Williams said at a conference Wednesday that repairs on the Syncrude Canada Ltd. upgrader, which shut after a power disruption in June, were complete and the last of three sections of the plant was ready to start operation. He also said that Suncor’s new Fort Hills oil sands mine was ramping up faster than planned after oil production started earlier this year. The mine is expected to operate at 90 per cent of its capacity by October.”
An additional factor is that the BP refinery in Indiana will soon be undergoing maintenance – resulting in lower demand for Canadian crude oil. This is an example of how Canada’s lack of refining capacity within our own country is a serious economic weakness.
Of course, the ongoing pipeline debacles, and lack of pipeline capacity is a key cause of the long-term price discount we’ve seen for many years in Canadian crude prices. This results in billions of dollars lost every year, meaning less money for tax cuts, fewer jobs, less money for the military, less money for infrastructure, and less money to help Canadian Citizens in need.