RE:RE:RE:Pretty Great Day....Kavern's Recap"People can't assume a 10 dollar or under differential for the whole year of 2019 to hold and continue..."
People have been saying that for over 3 months now.
Look Kavern, you say that you are a market watcher. You think that is a short covering rally thing alone in the WCS contracts? 3 months in the making with no very sharp spike up but, more of a steady climb?
Are these traders crazy to pay so much for spot WCS delivery while inventories are full and it costs $15-16 U.S. per barrel to ship via rail?
Reality is that you are looking at the wrong numbers. WCS is for Edmonton delivery to enter the pipe system and Houston pricing is Houston pricing.
Imperial Oil is restarting their train shipments because it is profitable to send the bitumen straight down there vs going through the pipe system. The true differential is not $10 (actually $8 right now) but, more than that because it cost $15-16 to ship straight to Houston.
I also suspect that Houston refineries prefer a really heavy oil right now vs diluted.
Cardboard