The crash in global crude oil markets has meant low prices for all producers, but no place more so than in Alberta’s oil sands. Transportation, blending and quality differentials mean that benchmark Western Canadian Select (WCS) is priced at a significant discount to light, sweet West Texas Intermediate. With WTI prices seemingly stuck below $30/bbl, the absolute price of WCS last week tumbled to all-time lows below $5/bbl. If they persist, will WCS prices south of $10/bbl generate wide-scale production shut-ins in the oil sands? Today, we continue our series on the challenges facing Alberta’s oil sands.
The collapse in heavy oil prices to record-low levels has presented a crisis for Alberta’s enormous oil sands industry unlike any it has ever seen before. As we discussed in Part 1, this collapse is even worse than in late 2018, when price differentials for Alberta’s WCS benchmark blew out versus WTI in response to severe transportation constraints. So bad was the pricing for WCS 15-plus months ago that the Alberta provincial government intervened and mandated oil production curtailments to restrict supplies. This, combined with the increased use of crude-by-rail, eventually lifted WCS prices out of the cellar last year. Over the same period, benchmark light oil prices like WTI remained relatively healthy, meaning the change in the price spread was almost entirely driven by regional dynamics affecting WCS.
This time around, things are different — the prices for all varieties of crude are down to their lowest levels in years. It’s one thing for WCS to sell at a $17/bbl discount to WTI when WTI is priced at more than $60/bbl, as it was two years ago this week. When WTI is priced at only $25-30/bbl, however, that same $17/bbl spread can be disastrous to an oil sands producer. As we mentioned in Part 1, the broader oil market collapse and the record-low WCS prices already are spurring capital spending cuts. Still, while these spending reductions may delay some planned production additions, there have been few signs — so far, at least — of a major dialing back of production from existing oil sands projects.
Join Backstage Pass to Read Full Article
About the song
"Rock Bottom" was written by Buddy Buie and J.R. Cobb, and appears as the second song on Wynonna's second solo studio album, Tell Me Why. The song was released in February 1994 and went to #2 on the Billboard Hot Country Songs Singles chart. Personnel on the record were: Wynonna Judd (lead, backing vocals), Eddie Bayer (drums), Steve Cropper (electric guitar), Steuart Smith (electric guitar), Willie Weeks (bass), Barry Beckett (Hammond B3 organ), Matt Rollings (Wurlitzer electric piano), and Bob Bailey, Kim Fleming and Suzy Willis (backing vocals).
Tell Me Why was recorded at Emerald Sound Studio in Nashville, with Tony Brown producing. It was released in May 1993, and went to #1 the Billboard Top Country Albums chart and #5 on the Billboard Top 200 Albums chart. Five singles were released from the album; all of them were Top 10 hits on the Billboard country music charts. The LP has been certified Platinum by the Recording Industry Association of America.
Wynonna Judd (Christina Claire Ciminella) is an American country music singer. Her solo records are all credited to the single name Wynonna. She rose to fame in the 1980s alongside her mother Naomi in the country music duo, The Judds. The Judds released seven albums and 26 singles, 14 of which were #1 country hits. As a solo artist, Wynonna has released nine studio albums, one live album, four compilation albums and 43 singles. She has won two Billboard Music Awards, four Academy of Country Music Awards, four Grammy Awards and one American Music Award. She still records and tours.
