Quote:
Originally Posted by GGG
Yes the market should drive the cost of the marginal barrel to the cost of marginal shipping. This isn’t happeneing because of market interference.
So more heavy oil gets bought from Venezuela and and Mexico. Short term Alberta probably makes more money with a supply restriction but it just crushes investment.
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Speculative, I think. Curtailment doesn’t crush investment, what it does is keep Alberta producers afloat while these other factors are at play. Curtailment had a huge role in stabilising the market during Q1.
I don’t think you’re fully considering the impact of capped export capacity on investment. Curtailment is keeping producers profitable while they’re able to ramp up oil by rail, and as producers are able to export more, they become even more profitable, and investment bounces back.