File photo by THE CANADIAN PRESS Suncor’s base plant and upgrader in the oilsands in Fort McMurray. Canadian oil producers are pocketing higher profits as a rise in world oil prices meshes with an improving Western Canada supply-demand balance that has dramatically cut the heavy oil discount they faced earlier this year.

Easing pipeline congestion lets Western Canada producers enjoy higher oil prices

CALGARY — Canadian oil producers are pocketing higher profits as a rise in world oil prices meshes with an improving supply-demand balance that has reduced the price discounts they faced earlier this year.

Analysts say temporary shutdowns at Alberta oilsands projects for scheduled maintenance this spring have eased the pipeline congestion that had been exacerbating the difference between bitumen-blend Western Canadian Select and New York-traded West Texas Intermediate crude prices.

That means the oil producers — some of whom cut back output in the first quarter because of poor prices — are seeing benefits from WTI prices that rose to three-and-a-half-year highs above US$71 per barrel this week following U.S. President Donald Trump’s decision to withdraw from the Iran nuclear deal.

“The rally in WTI has some fundamental support and is not all related to Iran and Venezuela,” energy analyst Randy Ollenberger of BMO Capital Markets pointed out in an email on Friday.

“Demand is clearly improving … A further drop in Venezuela production is also a real possibility that could provide a further boost to prices.”

Iran is the third-largest producer of crude within the Organization of the Petroleum Exporting Countries, exporting about 2.6 million barrels per day in April. Prices rose this week on speculation that its exports could be interrupted if sanctions are reapplied by the West.

Global oil prices are also being supported by factors including sliding heavy oil production from Venezuela, which is wracked by political instability, and strong adherence to production limits from OPEC and Russia under their 2016 agreement, said Kevin Birn, vice-president of the North American crude oil markets for IHS Markit.

“Western Canadian producers, any higher price is unambiguously good for them,” he said.

“The situation on pipelines has temporarily been resolved, primarily because of the upstream outages and (maintenance) turnarounds going on, which is allowing the system to clear… and hopefully allowing time for rail to come in.”

Just Posted

Central Alberta school districts are graded on their no-smoking policies

ASH wants them to tighten restrictions on tobacco, vaping, as well as cannabis

Runningbird, Wanner disappearances remain among Red Deer’s unsolved cases

The two indigenous women haven’t been seen in decades

Cannabis retailers have sights on Gasoline Alley

Red Deer County approves two development permit applications for cannabis retailers

Updated: 18-year-old killed in rollover near Rimbey

Hwy 53 down to one lane at collision scene

Decision next month in drunk driving causing death trial

Bobbi Crotty trial on four impaired charges wrapped on Tuesday

WATCH: Red Deer students take part in annual run

Dawe/St. Pat’s Run reaches 40th anniversary

Hushing my buzz: Alberta finance minister says cannabis warehouse will be secret

EDMONTON — Alberta is starting to stockpile marijuana but isn’t saying where… Continue reading

Relatives mourn death of Calgary-area woman killed by pet dog protecting child

CALGARY — Relatives of a Calgary-area woman killed by her own pet… Continue reading

Florence death toll climbs to 37; Trump visits stricken area

WILMINGTON, N.C. — The death toll from Hurricane Florence climbed to at… Continue reading

Toronto election proceeding with 25 wards after court sides with province

TORONTO — Ontario’s top court has sided with the provincial government in… Continue reading

Scheer welcomes former Liberal MP Alleslev to Conservative caucus

OTTAWA — Andrew Scheer is trying to fire up his Conservative troops… Continue reading

Trudeau says Canada wants to see ‘movement’ before signing revised NAFTA deal

WASHINGTON — Prime Minister Justin Trudeau signalled today that Canada wants more… Continue reading

Uber driver suing Bucs’ QB Winston over groping incident

PHOENIX — A female Uber driver in Arizona is suing Tampa Bay… Continue reading

Thousands of fans request grand jury probe of Prince’s death

MINNEAPOLIS — Thousands of Prince fans are asking federal authorities to open… Continue reading

Most Read