The difference in the price of Western Canada Select, a blend of heavy Canadian oil refined from bitumen, compared with West Texas Intermediate, the U.S. benchmark, has narrowed 36 percent since Horner delivered the budget three weeks ago. Horner attributed the narrowing gap to the increased use of rail shipments.
Alberta, which sits on the world’s third-largest pool of crude reserves, relies on royalties and taxation of the oil and natural gas industry for about a third of its revenue.
“We’re looking very conservative in our numbers,” Horner said today during an interview at Bloomberg’s Toronto office. “Our year-end is going to look better than anticipated.”
The oil-sands benchmark, West Canada select, traded at $80.83 a barrel at 1:05 p.m. in New York, or $15.25 less than U.S. crude. The gap reached a record $42.50 on Dec. 14.