Canada’s heavy-oil benchmark tumbled to a record low price on Thursday, the latest spate of bad news from the oil patch as Canadian producers struggle to ship product.
The spot price for Western Canadian Select fell to US$13.46 a barrel, down $2.29 from Wednesday’s close, according to Bloomberg. It was the lowest closing price for WCS in Bloomberg data that goes back to May, 2008. (WCS was created in 2004.)
Thursday’s drop in WCS occurred on a day when U.S. and international benchmark pricing for oil rose. Brent crude futures rose 50 cents to settle at US$66.62 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose 21 cents to settle at $56.46 a barrel – widening the widely tracked differential between the WCS and WTI price.
Canadian oil prices have plummeted in recent months amid a pipeline bottleneck that has led to higher inventories and forced producers to export an increasing amount of crude by rail and truck. Alberta produced more than 110 million barrels of oil in August, according to the latest available data from Statistics Canada, or nearly 20 million barrels more than two years earlier.
In response, calls have emerged to curtail production. The chief executive of Cenovus Energy Inc., one of Canada’s largest oil companies, urged the Alberta government this week to intervene and force producers to cut their output in a bid to prop up prices.