A witch’s brew of factors has continued to apply pressure to Gulf Coast price differentials 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 (red and blue lines in chart below). In recent weeks, the differentials for these crudes in the Gulf Coast have been hovering at their narrowest values (compare to black dashed line) since a brief period in March 2022 and, prior to that, since November 2020 based on data discussed in RBN’s TradeView report. These two grades of heavy oil are priced for physical delivery as a differential to the NYMEX-CME Calendar Month Average (CMA) crude oil price and have been holding at a discount tighter than $(3)/bbl to $(4)/bbl under CMA for several weeks as the crude oil market has been reaching a vigorous boil due to geopolitical and fundamental drivers. These drivers do not include snakes, frogs or bats but a powerful combination of pending tariffs to be imposed by the Trump administration, as well as market fundamentals regarding changes in crude flows, production and demand.
Featured Articles
- Analyst Insight
Cool to Be a Canuck — Canadian Heavy Oil in the Gulf Coast Sustains Tight Price Differentials
The price differential for Canadian heavy oil supplies in the Gulf Coast in the past few months has been running at its narrowest level in the past five years.
- 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
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.
