All war risk is gone from oil markets as prices are at lowest level in nearly a year for WTI, and nearly 2 years for WCS.

Brian Zinchuk

Brian Zinchuk is editor and owner of Pipeline Online

Graphic licensed to Brian Zinchuk via Storyblocks

If you haven’t been paying attention to oil markets, now might be the time, as significant benchmarks have hit their lowest point in nearly year for WTI, and nearly two years for WCS.

According to BNN Bloomberg, as of 2:25 p.m. on Dec. 5, Western Texas Intermediate (WTI) was trading for US$74.28, down US$2.65. That price is the lowest since closing at US$73.79 per barrel on Dec. 23, 2021, nearly one year ago.

But it’s Western Canadian Select (WCS) which has been much harder hit. It was trading at US$46.05 per barrel, down US$3.00. That’s the lowest price for WCS since Feb. 4, 2021.

While there is always a differential due to the quality of oil (heavy oil being of a lower quality and more difficult to handle and refine), when the differential gets this high, it means money is being left on the table. The nearly US$28 differential is now getting in the range where, historically, the Saskatchewan government has expressed concern about the WCS/WTI differential, and the lost potential revenues as a result. Increased takeaway capacity, specifically pipelines to tidewater, have been seen as an answer. While the Trans Mountain Expansion is under construction, it is taking much longer than expected, and is more than double its budget. The proposed Northern Gateway and Energy East projects, both of which were supposed to be in service several years ago, were both killed in 2015 and 2018, respectively.

These numbers also mean that all geopolitical risk from the Ukraine war have been eliminated from the market, despite the war being nowhere close to over, and Russia under significant sanctions for oil and gas export. While Canada had, in the early days of the war, promised to increase oil production by 300,000 barrels per day, both Premier Scott Moe and former Alberta Premier Jason Kenney, at the Lloydminster Heavy Oil Show in September, noted they have heard nothing from the federal government to make that happen.

• 0051 JML Hiring Pumpjack assembly
  0051 JML Hiring Pumpjack assembly
• 0049 Scotsburn Dental soft guitar
  0049 Scotsburn Dental soft guitar
• 0050 Pride Upkeep lawn
  0050 Pride Upkeep lawn
• 0048 Hutts Trucking Safety
  0048 Hutts Trucking Safety
• 0047 Estevan Oilfield Technical Society 2023
  0047 Estevan Oilfield Technical Society 2023
• 0046 City of Estevan This is Estevan
  0046 City of Estevan This is Estevan
• 0044 PTRC CCUS Aquistore
  0044 PTRC CCUS Aquistore
• 0043 ALX ten sizes
  0043 ALX ten sizes
• 0039 Summit ESP Saskatchewan lower third
  0039 Summit ESP Saskatchewan lower third
• 0041 DEEP Since 2018 now we are going to build
  0041 DEEP Since 2018 now we are going to build
• 0040 Southeast College safety tickets
  0040 Southeast College safety tickets
• 0032 IWS Summer hiring rock trailer music
• 0029 Latus Viro updated Latus phone
• 0025 Kendalls
• 0023 LC Trucking tractor picker hiring mix
• 0022 Grimes winter hiring
• 0021 OSY Rentals S8 Promo
• 0019 Jerry Mainil Ltd hiring dugout
• 0018 IWS Hiring Royal Summer
• 0013 Panther Drilling PO ad 03 top drive rigs
• 0011
• 0006 JK Junior
• 0004 Royal Helium PO Ad 02
• 9001
• 0002