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Western Canada Select widened to a record discount against WTI, falling to $41 per barrel by May 31, or $25 below WTI. Pipeline capacity is full in Alberta and the Permian basin, forcing producers to rely on rail or truck at high cost.
Global oil benchmarks are diverging as a result.
Pipeline bottlenecks push regional crude prices apart, which weakens the link between WTI and global benchmarks. This affects energy hedging costs for buyers more than direct feed supply.
oilprice.comNick CunninghamMay 31, 2018After 19 past bearish logistics events, Crude Oil (WTI) moved a median -1.5% over 5 sessions (37% higher; middle half -6.6% to +2.3%), and +5.3% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
