In recent months, the price differential for Western Canadian Select (WCS) and Access Western Blend (AWB), two grades of Canadian heavy crude oil that are actively traded for physical delivery to refiners and exporters in the Gulf Coast region, have held near their narrowest values in the past five years (black dashed rectangle in chart below). Based on data collected in RBN’s TradeView report, these two grades of heavy oil are priced in the spot market for physical delivery as a differential to the NYMEX-CME Calendar Month Average (CMA) crude oil price and have been sustained at discounts tighter than $(3)/bbl under CMA since the beginning of June. This is the best run of tight price differentials in five years going back to the closing months of 2020 (red dashed rectangle) when Canadian production curtailments in the wake of COVID disruptions created turmoil for the physical oil market. Only for a brief time in March 2022 (pink dashed circle) were differentials comparable to the current and 2020 tight price differential cycles.
Featured Articles
- Blog
Tighten Up - The Stars Align and the Western Canadian Heavy/WTI Differential Narrows
Any number of things can impact the price of specific types of crude oil at various locations — supply interruptions, takeaway constraints and refinery outages, to name just a few. Every so often, the stars align and just about all those factors narrow the differential between, say, Western Canadian Select (WCS) and West Texas Intermediate (WTI) at the U.S. Gulf Coast to near-record levels. Well, that’s happening now, for the first time in five years. In today’s RBN blog, we discuss the shockingly small WCS/WTI differential and what’s driving it.
- Analyst Insight
Tariffs, Tariffs Toil and Trouble – Tight Gulf Coast Cauldron Keeps Canadian Crude on the Boil
Canadian crude in the Gulf Coast continues to fetch its tightest price differentials in years as tariff threats and tight supplies keep the oil market on the boil.
- Analyst Insight
Price Spreads for Canadian Heavy Crude in the Gulf Coast Remain Historically Narrow
Canadian heavy crude oil price spreads in the Gulf Coast have become notably tighter in the past two weeks as the potential for more restricted global supplies of medium and heavy sour crudes has increased with greater U.S. sanctions.
