Western Canada Select discount reaches over $50

[jstubbs]

Per https://oilprice.com/oil-price-charts

Price of WTI crude is just under $71.

Price of WCS crude is just over $18.

Fun info.

[Twisted Canuck]

A new record by a wide margin. Not a goods record to have. If only somebody would have had the foresight to build a pipeline, either east or west....

[jstubbs]

Sidebar: this price is in USD. The true discount is close to $65 CAD.

[fishtank]

Originally Posted by Twisted Canuck

A new record by a wide margin. Not a goods record to have. If only somebody would have had the foresight to build a pipeline, either east or west....

pipelines = pipedreams

[AndrewM]

Just to put it into prospective. At 3,000,000 bbl/d, that works out to $150,000,000 per day in lost revenue due to pipelines or $54,750,000,000 per year.
People like to claim that the oil companies are losing the revenue but they fail to realize EVERYONE in the country is losing. Assume a royalty rate of 5%, that works out to $2,737,500,000 per year in government funds. Add in taxes. Add in money reinvested from the industry via pay checks. Add in more taxes. Add in every other pay check from money being spent on purchasing goods and services. Add in more taxes.
The numbers are astronomical. Think how many schools, hospitals, roads, hockey rinks, daycares and everything else that could be funded with this amount of money.

[jstubbs]

Originally Posted by AndrewM

Just to put it into prospective. At 3,000,000 bbl/d, that works out to $150,000,000 per day in lost revenue due to pipelines or $54,750,000,000 per year.
People like to claim that the oil companies are losing the revenue but they fail to realize EVERYONE in the country is losing. Assume a royalty rate of 5%, that works out to $2,737,500,000 per year in government funds. Add in taxes. Add in money reinvested from the industry via pay checks. Add in more taxes. Add in every other pay check from money being spent on purchasing goods and services. Add in more taxes.
The numbers are astronomical. Think how many schools, hospitals, roads, hockey rinks, daycares and everything else that could be funded with this amount of money.

A good point, however also need to realize WCS should by grade of crude sell for around a $20~ discount. It's more like $90,000,000 a day we're losing out on.

[AndrewM]

Originally Posted by jstubbs

A good point, however also need to realize WCS should by grade of crude sell for around a $20~ discount. It's more like $90,000,000 a day we're losing out on.

Yes you are right but I used a few approximations. Production is closer to 4,000,000 bbl/d by the looks of it and convert to CDN from US at 1.3x, the money adds up fast.

[stubblejumper01]

Originally Posted by Twisted Canuck

A new record by a wide margin. Not a goods record to have. If only somebody would have had the foresight to build a pipeline, either east or west....

They don't want pipelines to get Canadian oil to Canadian refineries, but over the last 6 years Canadian refineries have imported $120 billion dollars worth of foreign oil. I heard Charles Adler talking about this a few nights ago on Ched.
That's a huge amount and would have put a lot of royalty money into government coffers as well as created a lot of jobs for our economy.
I just don't understand how bringing oil over in tankers is better than having Canadian oil pumped through pipelines. That's Quebec's F U to Western Canada

[Twisted Canuck]

QC and BC....ground zero for environmental hypocrisy. BC sends more dirty coal to China then you can shake a global warming at...Montreal dumps raw sewage into St Lawrence. Victoria dumps raw sewage. But our oil is extra dirty and heavy, oh my, think of the Orca...whatever. It's a great deal for US refineries and the Buffet train lines that carry our nasty discounted oil....

[Big_Willy]

With that spread, at what point does it become non-viable to produce?

Less than $20/bbl seems awful cheap considering the effort that goes into the process...

[Sloughsharkjigger]

Yup Canada seems to be the whipping child of oil producing countries. Fact is we are a tiny country with a huge outside ownership.

[ehrgeiz]

What's odd is it feels like boom time again in the O&G industry, at least on paper and regulatory side. Can't imagine what it would be like if we had world oil prices.

[Trochu]

Originally Posted by Sloughsharkjigger

Yup Canada seems to be the whipping child of oil producing countries. Fact is we are a tiny country with a huge outside ownership.

I've often wondered why the Shells, Encanas, Huskys, government, etc. don't put some money together and try to present the facts/point the finger elsewhere/show their environmental record/etc. Victoria and Montreal can dump their raw sewage in the ocean, because everyone knows, Alberta is the problem in Canada. Lets see some footage of fish in plastic wrappers, get a camera down there and show it spewing into the ocean, it would be a marketing companies dream, but all I hear about is polluting Alberta.

[moosemad]

Sounds like gas prices are going up.

[raab]

Originally Posted by ehrgeiz

What's odd is it feels like boom time again in the O&G industry, at least on paper and regulatory side. Can't imagine what it would be like if we had world oil prices.

I dunno who your talking about, but I'm looking for a new job because I can't make enough money in the oilfield due to lack of work.

[tbiddy]

Originally Posted by ehrgeiz

What's odd is it feels like boom time again in the O&G industry, at least on paper and regulatory side. Can't imagine what it would be like if we had world oil prices.

Yup. Busiest I've been in 20 years. Albeit, making 1/2 as much.

Working 2-3x harder to make 50-60% less than I did in 2014 but I'm busy.

[fishtank]

yep one of my customer is a salesman at ford, he said lower commissions and don’t sell as much as before , has to get a part time job on the side .

[350 mag]

Stephen Harper's single greatest failure(after not repealing C-68) was not building Northern Gateway.

Canada's Economy would be booming and almost Recession Proof.

It delayed Canada's LNG industry as well.

[Big Grey Wolf]

WCS is not bitumen guys, it is a mid grade blend of light crude, condensate and heavy oil/bitumen. We are giving away a good quality oil product to them Americans at rock bottom price, no pipelines to tide water thanks to BC.

[AndrewM]

Originally Posted by Big_Willy

With that spread, at what point does it become non-viable to produce?

Less than $20/bbl seems awful cheap considering the effort that goes into the process...

Lots of companies have operating costs that are higher than that. The problem is that even if you shut it in, you still need to pay the fixed costs. There is also a cost with firing things back up and a cost to shut in so it may be better to continue to operate at a net loss.

[ehrgeiz]

Originally Posted by raab

I dunno who your talking about, but I'm looking for a new job because I can't make enough money in the oilfield due to lack of work.

I suppose it all depends on what aspect of oilfield you work in.

Like tbiddy said though, everyone's rates took a chopping so definitely less profitable than pre-2014 crash.

[Sakoman]

Originally Posted by jstubbs

A good point, however also need to realize WCS should by grade of crude sell for around a $20~ discount. It's more like $90,000,000 a day we're losing out on.

That $20 diff would be under $10 if we had more access east or west.

[Big Grey Wolf]

Partial Upgrading is the answer. 1) BC would not complain about bitumen 2)It would free one of every three pipelines to pump oil instead of condensate. ( 50% more oil being exported with existing pipelines)