Quote:
Originally Posted by ThePrince
Yup, Canadian production didn’t increase meaningfully since TMX has opened, so volumes that are being sent via TMX out to the coast are volumes that aren’t going down to the US south anymore. The southern refineries are ones that need heavy crude. And surprise, surprise, that’s the kind of crude Venezuela produces.
You can look at crude stocks in Cushing relative to oil prices. Generally, when stocks are low that means you have a pretty tight supply/demand balance, and therefore higher oil prices. So the last time stocks were this low, oil price was much much higher, whereas sitting at <$60/bbl right now. So we have the US setting production records and supply outpacing demand right now, but Cushing stocks low relatively, showing that volumes are being pushed elsewhere, ie. via TMX.
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There has been a very insignificant if any change to exports to the US I believe. Enbridge mainline has still been apportioned pretty much all year indicating it’s full. Keystone has had its flow restrictions in place due to the rupture but it’s a marginal impact.
Cushing stocks aren’t telling the complete story. The refining complex in the Padd 2 area have been full out nominating taking up a lot of capacity not leaving much to get by them, plus prices have not supported movement to the gulf coast, in fact it has been out of the money (transport charges have been more than the differential). Cushing is also no longer the blending and storage hub it once was, with it being used increasingly for operational storage and less so for what it was traditionally used, making some historical comparisons a bit tricky,