{"id":2881,"date":"2020-10-22T14:41:18","date_gmt":"2020-10-22T20:41:18","guid":{"rendered":"http:\/\/accesstomexico.mx\/blog\/?p=2881"},"modified":"2020-10-22T14:41:18","modified_gmt":"2020-10-22T20:41:18","slug":"lower-mexican-output-in-2021-will-raise-canadian-heavy-oil-prices","status":"publish","type":"post","link":"https:\/\/accesstomexico.mx\/blog\/lower-mexican-output-in-2021-will-raise-canadian-heavy-oil-prices\/","title":{"rendered":"Lower Mexican output in 2021 will raise Canadian heavy oil prices."},"content":{"rendered":"\n
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WORLD OIL<\/a><\/p>\n\n\n\n

Canadian oil prices are poised to strengthen next year as Mexican heavy crude exports to U.S. Gulf Coast refineries dwindle, according to BMO Capital Markets.<\/p>\n\n\n\n

Heavy Western Canadian Select\u2019s discount to the West Texas Intermediate benchmark could narrow to $5 to $7 a barrel next year, BMO said in a report Wednesday. Oil sands producers will benefit from less output of competing crude from Latin America as Pemex expects to cut exports while Venezuelan supplies remain off limits due to U.S. sanctions.<\/p>\n\n\n\n

Western Canadian Select discount to WTI strengthened to less than $10 a barrel since mid-April, after more than a million barrels a day of oil sands production was shut due to the Covid-19 pandemic. The strong differential has remained near $10 even as oil sands supplies have returned to the market.<\/p>\n\n\n\n

U.S. Gulf Coast and Midwest refiners invested billions of dollars in recent decades to process heavy crude, of which Canada is among the world\u2019s biggest producers. The country\u2019s oil, produced in the oil-sands mines and wells in Northern Alberta, has only become more valuable as alternative grades from Latin America have diminished, a trend that\u2019s poised to continue in the coming years.<\/p>\n\n\n\n

Pemex is forecasting a reduction of almost 70% in exports of its flagship heavy crude between 2021 and 2023, according to people familiar with the situation. The drop will happen due to declining output and the need to supply crude to a new $8 billion refinery championed by the country\u2019s President Andres Manuel Lopez Obrador.<\/p>\n\n\n\n

U.S. Gulf Coast demand will create tension with Midwest refiners. \u201cChicago refiners have limited access to alternative sources of heavy oil and will bid heavy oil away from the Gulf Coast market to ensure they have enough supply,\u201d the bank said. \u201cWe believe that this could translate to stronger prices for WCS or a tighter spread between WTI and WCS.\u201d<\/p>\n\n\n\n

Increased local refinery demand and more pipeline export capacity will eliminate the need for Alberta\u2019s mandatory production limits and further help Canada\u2019s oil producers, BMO said. Limits were imposed by Alberta\u2019s government two years ago to shore up prices but later relaxed after a shortage of pipelines created a bottleneck that stranded supplies.<\/p>\n\n\n\n

Three major oil export pipelines are currently under construction. Next year TC Energy Corp. plans to add 50,000 barrels a day of additional exports to its existing Keystone pipeline using so-called drag resistance agents after signing new 20-year contracts with shippers.<\/p>\n\n\n\n

The relatively brighter future for Canada\u2019s oil sands producer contrasts with U.S. shale producers. Once constructed, oil sands operations keep pumping out crude at relatively low operating costs whereas oil from the shale oil producers of Texas and North Dakota are struggling to keep drilling amid depressed prices.<\/p>\n\n\n\n

Robert Turtle. (2020). Lower Mexican output in 2021 will raise Canadian heavy oil prices. USA. World Oil.<\/em> Recuperado de <\/strong><\/p>\n\n\n\n

https:\/\/www.worldoil.com\/news\/2020\/10\/22\/lower-mexican-output-in-2021-will-raise-canadian-heavy-oil-prices<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

WORLD OIL Canadian oil prices are poised to strengthen next year as Mexican heavy crude exports to U.S. Gulf Coast refineries dwindle, according to BMO Capital Markets. Heavy Western Canadian Select\u2019s discount to the West Texas Intermediate benchmark could narrow […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2881","post","type-post","status-publish","format-standard","hentry","category-uncategorized","clearfix"],"_links":{"self":[{"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/posts\/2881","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/comments?post=2881"}],"version-history":[{"count":1,"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/posts\/2881\/revisions"}],"predecessor-version":[{"id":2883,"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/posts\/2881\/revisions\/2883"}],"wp:attachment":[{"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/media?parent=2881"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/categories?post=2881"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/tags?post=2881"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}