CHARTS: The coming critical minerals trade war is BRICS short of a load
"While a large number of countries around the world continue to talk about securing raw material supply, China is actually doing something about it."
The price of US crude oil crashed through the $80/barrel level on Friday afternoon bringing its losses to more than 10% in September and suffering its worst quarter since the 2008 recession.
At the same time the discount on Western Canada Select widened to $10.50/barrel meaning oil sands producers now sell some of the cheapest fuel on the planet. The international benchmark for oil was pegged at over $102 on Friday. Canada exports 2 million barrels of oil per day and a lack of pipelines means all of it goes to the US Midwest, the pricing point for US crude.
The gap between the US crude benchmark West Texas Intermediate which closed at $78.75 a barrel in New York and Brent November contracts increased $1.63 to $23.44 a barrel. The spread settled at a record margin of $26.87 earlier in September and many traders see it going as high a $40/barrel. Historically WTI has traded at a premium to Brent, but has steadily declined since the Saudis dropped the WTI contract as their benchmark in 2009.
Syncrude, a light oil made from oil sands after undergoing an expensive upgrading process, still attracted a premium to WTI of $7.75 a barrel on Friday, but that is down from a premium of $18 in August during the Canadian Natural Resources upgrader outage and is set to return to historical levels of a slight discount.
The Globe and Mail reports despite the fact that Brent futures contracts are now the benchmark for more than 65% of the global trade in crude, they are less liquid than WTI contracts, making them more prone to manipulation by oil traders and hedge funds.
7 Comments
Lbest
Why the surprise here ? Canadian oil will furthur decrease in price; our target is $67.00/barrel by year-end.
I AM ALBERTA OIL
Should be no discount for ANYONE buying the oil I bust my ass to produce this just pisses me off,and the guys who work in the sands are gonna be pissed as well when I show them this…mmmm wonder what we can do about this… we’ll see ..screw uncle sam I say
Dan Coll
Rant away folks.
This is not a country, it’s a foreign owned workcamp.
Hell, even regular hookers are smart enough to have pimps protecting their side of the bargain
Ed233
Canada cannot afford to support a policy that diverts practically 100% of its oil resource to the US market. US is in a big way printing dollars by nefarious means. The ultimate result is a failure to deliver a quality currency. Contracts for oil at fixed rates will bring Canada down with the USA. A better policy for Canada is to immediately arrange to build pipelines to the west and to the east in order to participate in the growing demand of the emerging markets. It makes little sense to invest billions in a country through the means pipelines in a country that will have a balance of trade deficit well into the foreseeable future. Diversify now before its too late. LOL Looking after your money.
Martinmojzisik
Dan…Alberta Oil…your comments reflect mine%100!!!
I am quite confident in saying that the majority of Albertans share the same view…SADLY however, the majority of the same likeminded individuals are NOT nearly as vocal as they NEED to be.
On an ever sadder note, the mojority of CANADIANS don’t even know that the oil companies that produce our oil are owned by NON-CANADIAN companies…(ie,Shell, Esso, Petro-Canada).
Sure they employ fellow Canucks…but then turn around and sell BACK to us which is essentially OURS to begin with!
Corporate GREED runs the show…not just a US affliction…our own GOVERNMENTS are undermining CANADIANS! By promoting the export of our natural resources lessens what WE have as a nation. While countries are running out…we keep thinking of ways to sell more…that’s the wrong way to be heading folks.
Never-mind Uncle Sam…I say stick it to OPEC. The organization is riddled with corruption and promotes the manipulation of oil pricing to it’s own ends…and the ends of the few middle eastern countries(that sadly produce the majority of oil).
I suggest we act NOW to protect our resources and form our own ‘OPEC’! That way WE can dictate the who what where and how of our own resources. Not some far off desert.
We should be focusing on the development of greener technology…not capturing the emissions and pumping them underground…what a ridiculous idea! (born in US)
This country lacks the leadership to stand ground on the basic principles…like, keep it Canadian…we might not make as much money…but in the end, our country will be better off because we would be STABLE.
Ending this…GREED GREED GREED…until humans can overcome this affliction we will continue to DRILL BABY DRILL…and the earth will continue to BURN BURN BURN.
I AM ALBERTA OIL
Ok soooo how many of you out there know that we produce more than enough oil for our domestic needs,what that means is we have on hand enough oil to meet the needs of fuel consuming equipment,thats cars,trucks,trains,ships,aircraft ect the problem is we do not have the refining capacity in Canada to meet our needs so we sell the crude to the U.S. cheap they refine it then sell it back to us at a premium,on the high end in Canada we should pay no more than .69 ltr for gas.What we need are refineries at least 4 and then and only then will fuel prices here reflect production amounts.So spread the word and perhaps when the average Canadian understands this,and puts pressure on Ottawa to stop bending over for the oil compinies to screw us We,ll see fuel prices in this country sold at a fair rate
496gman
I’m new to this site, (but not new as in new) and I figured I was pretty knowledgeable but I gotta say WHAT THE FRACK? How is it possible that all this oil is being given away at prices like these when we have been force fed the belief that what we pay for our energy is simply a reflection of world pricing. This is bullshat and I am starting to vibrate with rage…