As concerns over tensions between the U.S. and Saudi Arabia heightened over the weekend, Brent and WTI prices surged yesterday. While these light, sweet benchmarks drive the market attention most days, other heavier crudes are making interesting moves.
Refiners say that heavy crudes cost around $10 per barrel more to refine, driving a discount to the lighter blends, but Western Canadian Select has been trading below $20 per barrel, a $50 discount to WTI. At only a few dollars to ship these crudes via pipeline, Canadian oil offers notable opportunities to refiners.
How the market responds to this cheap supply will be worth watching going forward. WTI gained $0.80 yesterday to close at $72.00 per barrel.
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