Canada is the biggest loser among oil producing countries. Its heavy oil/bitumen production is selling at more than a $50 discount to Brent. Why? Blame increasing production, tight pipeline capacity and refineries undergoing maintenance in the Midwest. Refinery capacity is just not growing fast enough!
Western Canada Select at $50 per barrel is so cheap you could actually sell it at the dollar store (3 litres for 1 dollar). Prices are expected to improve in the second half of 2013 as refineries return online. As it stands, Canada is losing some $2.5 billion a month!
Tax loss selling is entering its last days. There’s potentially several buying opportunities out there in certain E&Ps and Oilfield Services companies. However, the problem this year lies in the fiscal cliff fiasco, will the Congress kids find common ground? There are still a few days to find out!
Finally, it’s the holidays AND the world didn’t end according to the Mayan calendar.
So Merry Christmas & Happy Holidays everyone!