What is Going On With Canadian Oil

Zero Hedge, November 14, 2018: Yesterday we remarked that while the pain for US energy traders has been palpable, it is nothing compared to the mass hysteria taking place in Canada, where the price of Western Canada Select oil has collapsed just above $15 as far too much local production remains landlocked, and in desperate search of any buyer.

Today, none other than "world renowned commodity guru" Dennis Gartman - who correctly picked the exact moment to advise his clients to "short this rally" and is still short even as Marko Kolanovic has been repeatedly urging JPM clients to triple down on the S&P where he saw nothing but smooth sailing - picks up on this theme, and in his latest letter to clients expresses his shock at the collapse observed in local prices.

We excerpt from his latest letter below.

IF YOU THINK THAT WTI AND/OR BRENT CRUDES ARE CHEAP... then consider for a moment what is happening in Canada these days where Western Canada Select crude (WSC as it is always referred to) trades below $16/barrel or a stunning $43/barrel “discount” to WTI! WCS is a “heavy” crude type with an API of about 20 while WTI is a “light” crude with an API “gravity” rating near 40 and so by definition given the greater difficulty in refining WCS compared to WTI it has always sold at a discount to WTI. It had to; there had been little choice.

Read More