Shortage of Heavy oil in the US developingListen to this interview with Art Berman, especially around the 11 minute mark. By the 25 minute mark he begins discussing the heavy oil shortage in the US.
He states that, brace yourself,
85% of the oil produced in the US is not refinery ready, and needs to be blended with heavier oil. With a shortage in the US of heavy crude, do you really think the WCS price is going to stay low -I don't. Shortages cause the price to go up.
Let's say that 90% of Alberta oil goes through pipelines at the moment -costs about $8 a barrel.
As we clear the backlog from the keystone leak a few months ago, there could be 10% of the oil travelling via rail -that costs around $12 per barrel.
The current WCS price is way lower than those costs would justify, especially when you factor in the shortgage of heavy oil in the US developing.
Thanks to kxviswan over at IV for this great interview. It is a must listen
https://www.macrovoices.com/podcasts/MacroVoices-2018-02-01-Art-Berman.mp3