Bottlenecks into the U.S. market are still trying to slowly take out the price gap between Canadian oil and West Texas Intermediate, even as strong as the global demand is expected to overall crude price in 2018, this is according to a forecast by Deloitte.
Deloitte is a consulting, advisory and tax service provider that is based in the U.S. and from their resources the company has optimistic expectations that the demand for heavy Alberta crude would rise like similar quality imports from Mexico and Venezuela depreciates.
Assuming Canada can bump up its market share and get more access to U.S. heavy oil refining capacity, the price difference between the Western Canadian Select and WTI prices will more likely shrink.
Deloitte also noted that OPEC member seem set to extend their current production cuts throughout the year, which could also cause optimism on the Canadian energy sector.
The report states that, over the last quarter, over the last quarter, crude oil prices rose on news of continued compliance by OPEC participating nations.
Deloitte forecasts WTI to be $55 US per barrel in 2018 and Western Canadian Select (WCS) to be $46.40 Cdn per barrel in 2018.
Although this could be good news for Canadian oil, Deloitte says that the volatility that was seen in 2017 could still be present in 2018, partly because of the planned maintenance project on gas transportation infrastructure, but also because the U.S. natural gas production through both shale and gas plays.