25 March 2013 16:27 [Source: ICIS news]
HOUSTON (ICIS)--Prices of heavy Canadian oil and Bakken crude in North Dakota have risen since 2012 as refinery demand for cheaper crudes increases, an analyst said on Monday.
“The value of Canadian oil has been blossoming thanks to intense demand from refineries around the country seeking to buy the advantaged crude oil and make more profit,” said GasBuddy.com Senior Petroleum Analyst Patrick DeHaan.
Typically, the heavier Canadian oil has been sold at a much more discounted price than other, lighter crudes. In December, Canadian crude was at a discount of $35-45/bbl under West Texas Intermediate (WTI) oil, and as much as $50-60/bbl under Brent crude, DeHaan said.
But recent prices have weakened those discounts. DeHaan said that now, Canadian crude is about $15-20/bbl under WTI.
Furthermore, shipping Bakken crude in North Dakota is pricier as empty rail cars are harder to find.
“All of this means one thing. Canadian crude and Bakken crude, while still advantaged, are seeing their prices soar as refineries target these oils for their refineries,” DeHaan said.
“And quietly in recent years refineries have been upgraded to be able to process the heavier lower quality crudes as well, so many refineries are well positioned for this,” he added.
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