The Canadian oil industry is going through a difficult time. Despite the stable growth of oil prices, recently locally produced crude took a downward swing. The difference in prices between the American WTI and the Canadian WCS reached $27 a barrel, which is the highest level in 4 years. Interestingly, WCS has always been cheaper but never to such an extent.
According to experts, oil prices decreased due to oversupply caused by the shutdown of the Keystone TransCanada pipeline in November. The supply disruption also led to WTI growth. In addition, during the long repair works, Canada significantly increased its oil inventories. That is why the main problem of Canadian oil producers today is the absence of an alternative pipeline, despite the fact that recently the authorities found ways to supply oil from Canada.
While the price holds at such a low level, the US refineries can deliver oil by rail. Of course, at first glance, it seems unpractical. However, if we take into account the current price of WCS, this idea is not so absurd.
