GREY:SGLRF - Post by User
Comment by
hakodateon Nov 24, 2013 12:25am
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Post# 21935555
RE:Explaining oil price differentials
RE:Explaining oil price differentialsSpyglass oil, in their reports, is benchmarked to Edmonton Par (light oil). Spyglass says specifically "The US WTI is the basis for settling of the Edmonton par benchmark to which most of Spyglass’ crude is marked."
If you look at their Q3 report you will see that their realized oil price was $97.38 at a discount of just over 7% to Edmonton Par at 104.93. Meanwhile WCS for Q3 was about $92. As Spyglass said, "most" of their oil is benchmarked to Edmonton Par. The oil not so benchmarked must not be so light and/or sweet which makes their discount to Edmonton Par greater than other companies that I follow (0-5%). And previously their discount was over ten per cent. Last quarter's reduced discount may be a good sign that more light oil is coming on board.
Unfortunately both WCS and Edmonton Par have dived this month. Recent prices are:
WTS - $94.72, Edmonton Par - $76.95, WCS - $64.86. The reasons in the article for the WCS discount that relate to lower demand and shipping bottlenecks apply equally well to Edmonton Par (but not the quality issue).
qwqw, I am sure you are aware of the above. I just wanted to make clear to other readers the primary benchmark for Spyglass.