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POTENTIAL NETBACKS FOR OIL SANDS CRUDES AND PRICING DYNAMICS

Potential Netbacks for Oil Sands Crudes and Pricing Dynamics

Study Released April 25, 2013

Commodity Report - Crude Oil - March 2013

Prior to the shale and tight oil boom in the US and significant expansion of oil sands in Canada, Canadian crude oil deliveries to market were stable and relatively predictable. In general, the Canadian crude oil pipeline network was originally designed to transport crude to the US Midwest (PADD II). As production started to rise in both countries pushing against pipeline capacity limits, it flooded the US Midwest with Canadian heavies and North Dakota’s Bakken oil. While the PADD II region will remain a large market for Canadian crudes, this article will look at the other market options for dilbit crudes,1 which in CERI’s view, are the most feasible in the short- to medium-term. They are US PADD III – US Gulf Coast (USGC), and US PADD V – US West Coast (USWC). Figure 1 presents Canadian heavy crude oil supply and disposition in 2011, which is the latest actual data available..... Download full report.

March 2013