19 March 2013 15:33 [Source: ICIS news]
SAN ANTONIO, Texas (ICIS)--The rising supply of both US and Canadian crude oil will change the typical distribution patterns within North America, an industry analyst said on Tuesday.
Heavy crude oil markets in Canada will be “in extreme stress” by the mid-2020s because of a lack of a connection to the Asia-Pacific markets, and the heavy crude producers will incur substantial pricing discounts, Neil Earnest of Muse, Stancil & Co said at the American Fuel & Petrochemical Manufacturers (AFPM) annual meeting.
The impact of revenue on the heavy crude producers and tax-collecting government entities will “be enormous”, Earnest said.
This lack of connectivity through exports with the Asian-Pacific markets from western Canada will also impact the light oil producers in the US, though at a slightly less rate, he said.
With the completion of the Northern Gateway pipeline and the Trans Mountain Expansion pipeline project, Earnest said the supply glut in North America will be eased with exports to the growing demand in the Asia-Pacific markets.
The AFPM annual meeting runs through Tuesday.
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