CALGARY — Analysts say they’re expecting strong second quarter earnings from Canadian heavy oil producers.
This is because the difference between the price of Western Canada Select (WCS) — an oilsands bitumen blend — and New York-traded West Texas Intermediate (WTI) narrowed dramatically in the quarter.
Oilsands bitumen typically trades at a discount to global crude oil prices for a number of reasons, including pipeline export capacity.
But a report from RBC shows in the second quarter, that discount narrowed to an average of US$15.07, versus US$24.77 in the first quarter.
Analysts say that means investors should expect strong cash flows when the Canadian oil industry begins to report its second quarter earnings later this week.
While the WCS discount has recently begun to widen again, analysts say it should narrow once the Trans Mountain pipeline expansion comes into service early in 2024.
This report by The Canadian Press was first published July 25, 2023.
The Canadian Press
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