Cold Blast Means Lower Prices for Canadian Oil-Sands Producers
- Benchmark crude trades at year low as oil transport slows
- Alberta, Saskatchewan temperatures fall to below -30 Celsius
Photographer: Brett Gundlock/Bloomberg
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An arctic blast sweeping across Western Canada is weighing on the price of heavy crude.
Temperatures of -30 degrees Celsius (-22 Fahrenheit) and lower have descended on Alberta and Saskatchewan -- cold enough to render the region’s viscous oil rock solid. To transport it, producers must blend in more of a lighter crude called condensate, thereby reducing the volume that can be shipped by pipeline and increasing transportation costs, according to Kevin Birn, IHS Markit’s director of North American crude oil markets.