Canadian Oil Discount Seen Shrinking on U.S. Re-Exports
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Canadian oil producers, facing delays on new export pipelines, are poised to reap higher prices in Europe and Asia as growing rail deliveries to the U.S. are sent overseas, according to FirstEnergy Capital Corp.
In two years, 600,000 barrels a day of Canadian oil sent to the U.S may be re-exported to other destinations, up from 25,000 barrels now, Martin King, a commodities analyst at FirstEnergy in Calgary, said in a presentation today. The re-exports are the best way for rising Canadian light and heavy crude output to approach world prices right now, he said. Growing rail shipments and more U.S. pipeline space will lift Canadian supplies to the Gulf Coast, he said.