RE:It had me at Unhedged There is another benefit to holding IPCO that practically no one ever mentions. That is that Heavy crudes once refined and cracked generally provide a greater quantity of product than lighter crudes
(as much as 10 to 20% more. At higher crude prices, the processing gain becomes increasingly important.Another advantage is that Russian Urals crude is fairly heavy (30.6 API ) versus 20 API for WCS and 22 API for Maya. So the removal of half a million bpd of Russian crude is more likely to favour the heavier Canadian blends.
I think that IPCO made a mistake by locking in a $13 differential vs WTI. (On 60% of their production)
I believe we will soon be entering a new era of lower differentials for a very long time!!