“Based on some of the longstanding expert rhetoric, one could easily be led to believe the WCS discount represents a price gap that can be fully closed,” writes reporter Jameson Berkow. But while much of the discount “can be attributed to production growth outpacing the energy industry’s ability to get new output to market, such as a lack of new pipelines, some of the WCS discount is based on a factor beyond anyone’s control—quality.”
The issue is that, “in its natural state, oil sands bitumen is as viscous as peanut butter,” Berkow explains. “That makes it more expensive to refine, meaning refiners would never pay as much for it as they would for the lighter, sweeter stuff more closely tied to WTI.” #cdnpoli
