Canadian Crude Is So Cheap It Costs More to Ship Than to Buy
- Heavy Western Canadian Select hit record low of $4.58 a barrel
- Shipping tolls on pipelines to Texas now exceed oil’s cost
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Canadian heavy crude has become so cheap that the cost of shipping it to refineries exceeds the value of the oil itself, a situation that may result in even more oil-sands producers shutting operations.
Western Canadian Select crude in Alberta dropped to a record-low close of $5.06 a barrel on Friday, according to Bloomberg data going back to 2008, cheaper than a Starbucks venti-sized pumpkin spice latte. WCS is composed of bitumen mixed with light condensate so it can flow through pipelines. The bitumen’s value was at about $1.42 a barrel. Synthetic crude, produced from oil-sands bitumen that’s been run through an upgrader, fell to $9.56 a barrel.