Canada commodity prices fall 4.6% in December from November

29 January 2013 17:44  [Source: ICIS news]

TORONTO (ICIS)--Canadian commodity prices fell 4.6% in December from November, largely because of sharply lower prices for Canadian oil, a bank said on Tuesday.

Toronto-based Scotiabank said that December’s decline in its monthly commodity price index was driven by lower prices for western Canadian heavy crude oil – down to $57.84/bbl in December, from $72.47/bbl in November.

Western Canadian heavy oil trades at a discount to West Texas Intermediate (WTI), given the more complex refining required for heavier crudes.

In addition to the refining process, prices for Canadian heavy crude oil are affected by inadequate export pipeline capacities, as well as Canada’s commercially risky reliance on the US as its key oil export market, Scotiabank commodity markets specialist Patricia Mohr said.

“The delay in US approval of the northern leg of the Keystone XL pipeline has raised further concern over pipeline capability and suggests the need for export diversification,” she added.

Meanwhile, Canadian prices for potash and sulphur exports were also weaker in December, compared with November, Mohr said.

By: Stefan Baumgarten
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