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Canada's heavy oil has quietly become the hottest commodity in North American energy.

In less than two months, the price of the Canadian benchmark heavy crude has surged more than 70 per cent, outpacing West Texas intermediate (WTI), Brent and a bunch of other regional types of oil by wide margins.

It hasn't been a big topic of conversation though, partly because investors have been focused on sharply weaker first-quarter results from some of the largest oil sands and heavy oil producers.

Quarterlies from such players as Suncor Energy Inc. and Cenovus Energy Inc. were dragged down by the collapse in oil prices between January and March. Cenovus, which pumped out a hefty loss for the period, said its average bitumen price tumbled 60 per cent.

It's looking now that conditions are changing, for lots of reasons. It's not a return to the big margins of a year ago, not by a long shot, but after months of gloom the industry will take it.

Let's back up. Western Canadian select, a blend of conventional heavy crude oil and bitumen from the oil sands, became a widely quoted indicator of energy-industry health a few years back, when the spread between its price and that of WTI, the North American benchmark, blew out beyond $40 (U.S.) a barrel.

That meant a barrel of WCS was worth, at times, 60 per cent of WTI or even less, due to a combination of surging production in northern Alberta and limited capacity to move the goo out of the province on pipelines as new pipe projects get bogged down in regulatory delays. The result was the so-called bitumen bubble, which the Alberta government blamed for sapping energy revenues.

Since then, the spread has fluctuated with increasing demand, additional pipeline capacity, a huge increase in rail shipments, and recently, the global oil price slide. The latter was the major problem early this year.

Something's bubbling in a different way now. On Tuesday, WCS for June delivery sold for $8.30 a barrel under WTI, according to Net Energy Inc., which runs an electronic oil exchange. Meanwhile, WTI popped above $60.

Compare that with the recent March 17 nadir, when Canadian heavy sold for $13.75 under WTI at $43.46. That put the price of the stuff at $29.71, a sum that erases the profit margin for virtually every producer.

According to a report published on Tuesday by TD Securities Inc., there are a host of factors behind the gain, apart from normal seasonal strength driven by demand for the thick crude to make asphalt as road paving kicks into gear across the continent.

For one thing, access to various U.S. markets keeps improving, even as TransCanada Corp.'s Keystone XL project remains in limbo in Washington. Existing networks are being expanded and rail capacity is increasing, although TD points out that the current spread still makes shipping Canadian heavy oil to the U.S. Gulf Coast by train an uneconomic prospect.

Canadian oil shipments to the United States keep growing as competing supplies from Venezuela, Mexico and other producing countries fall, a trend that is not expected to let up any time soon.

Refineries in the United States, meanwhile, are pumping out petroleum products at five-year highs, and as far as key markets for Canadian oil are concerned, notably the U.S. Midwest, it means more heavy crude getting processed.

The TD analysts pointed out a few companies poised to benefit most from the rapid shift in the heavy oil market, in terms of exposure to it, putting MEG Energy Corp. at the top of their list.

All of MEG's output is bitumen, and with every $5 increase in WCS in 2016, its annual cash flow climbs 40 per cent. The next two on the list are BlackPearl Resources Inc. and Northern Blizzard Resources Inc.

In the seven weeks that heavy crude has staged its rebound, MEG shares are up 27 per cent, BlackPearl's 37 per cent and Northern Blizzard's 21 per cent.

It shows there's much at play to turn heavy crude from goop to gold very quickly.