The Differential Divide
Oil prices have been all over the place of late, but there are a few companies that have been able to benefit from the spreads
It’s no secret that the companies in Alberta’s energy sector, and indeed the province itself, have been hit hard over the last year by the spread between West Texas Intermediate (WTI) and Western Canadian Select (WCS). In January the differential between the two blew out to nearly $40 per barrel (it has averaged US$16 per barrel since 2008) and it wasn’t long after that the province cited it as a reason (the so-called “bitumen bubble”) for its massive budget deficit. And while it may not have that excuse to fall back on in 2014 now that the spread appears to be closing, its existence isn’t all bad news for Alberta’s energy sector. Companies with substantial refining capacity like Cenovus and Suncor have benefited from the falling price for Canadian heavy oil. How much? Have a look.
July 2012-July 2013, price per barrel