Due to rising refining costs, Canadian oil sands prices lag behind futures market prices

According to World Petroleum reported on June 6, a Toronto-based analyst said that the price of Canadian heavy crude oil has fallen sharply relative to futures prices because of high refining costs, rather than the bottleneck
of pipeline transportation capacity that has plagued the industry in the past.

Data compiled by Bloomberg showed that on Friday, Western Canada's oil discount to West Texas Intermediate Oil (WTI) widened to more than $20 a barrel, the largest
since last November.
In recent years, shortages of export pipelines have led to discounts on Canada's heavy oil expanding to $
50 a barrel.
Johnson, a market economist and managing director of Price Street, wrote in a note that the reasons now have to do with the broader global market, which is almost out of control
of the global market.

The current half discount on the price of West Texas Intermediate crude is due to the quality of the crude oil
.
Johnson said the high sulfur content and heavy weight of oil produced in the northern Alberta oil sands mean that it is always lower than light crude because of its higher refining costs, but the so-called "quality discount" has recently expanded from $4 to $
10 a barrel.
By contrast, transportation costs have been stable at around
$7 a barrel.

Rising natural gas prices have led to higher refining costs for heavy crude oil, exacerbated by insufficient refining capacity in the U.
S.
Gulf Strip
.
Meanwhile, OPEC+ is producing more crude and releasing more sulfur to the market, and Canada's output has been strong
since the opening of a new export pipeline late last year.