Seeking Alpha

Alberta crude price breakout spells danger for Keystone XL

  • The price of crude from Alberta’s oil sands has surged nearly 60% since November, as new pipelines connect producers with refineries on the U.S. Gulf coast, meaning Canadian producers can begin to see a better return on investment while U.S. refineries can lessen their reliance on oil from Mexico and Venezuela.
  • It also lessens the importance of the Keystone XL pipeline (TRP), WSJ's Ben Winkley writes, making it that much easier for the White House to delay a decision to clear the project.
  • Traders say the current price gap of ~$20 between Alberta crude and benchmark WTI is about right, so with just a handful of refineries set up to receive tar sands crude, more transport capacity may not be needed, Winkley suggests.
  • ETFs: USO, OIL, UCO, SCO, DTO, DBO, CRUD, USL, DNO, UWTI, DWTI, SZO, OLO, OLEM, TWTI
Comments (5)
  • Ruffdog
    , contributor
    Comments (1658) | Send Message
     
    I thought that Venezuela crude was dirtier than Canadian tar sand. So it seems to me that until all the Venezuela crude is replaced by Canadian and all crude trains are replaced by pipelines, more pipelines are needed, Keystone or others.
    7 May 2014, 02:00 PM Reply Like
  • Bruce Baxter
    , contributor
    Comments (29) | Send Message
     
    Don't hold your breath, highly unlikely that Obama approves the Keystone pipeline.
    7 May 2014, 04:11 PM Reply Like
  • Charlie Ponzi
    , contributor
    Comments (872) | Send Message
     
    Stick a fork in Keystone, it's done.

     

    Rail and alternative pipelines to the Maritimes and BC render it superflous.
    7 May 2014, 05:23 PM Reply Like
  • bobby44
    , contributor
    Comments (253) | Send Message
     
    It is not about the 20 bucks. Mexico production is WAY down. Venezuelan production is falling as well. The new president is making Chavez type noises to Washington. Are you comfortable with the new energy world order where the USA is a poor cousin to players like Putin and the EU?

     

    We need to do more regarding N. American energy supply, however the trade in liquid energy is still the #1 commodity in the world. You can never have too much oil & gas available for trade or use at home due to politics or disasters.

     

    Keystone may never be built but that is irrelevant to world conditions. Someday we will all want security and a lever on our not so friends.
    7 May 2014, 07:22 PM Reply Like
  • Blue22
    , contributor
    Comments (260) | Send Message
     
    You guys never get the picture clear. The new, massive line from the Central Oklahoma pipeline cluster is now ready to open all of its valves. That along with the existing ENB line, completed last year and a twin line coming, will be transporting an enormous amount of Alberta oil to Valero and other refineries in Texas. That will mark the end of all imported sour oil or any import into the gulf period!

     

    TRP has had a massive pipeline system from Alberta to the clusters in Illinois, which also feed the Gulf refineries. All the tree hugger noise about the aquifer in Nebraska only show the need for them to read a map. When the route was changed it was located over sites that were far East of the Aquifer.
    7 May 2014, 08:11 PM Reply Like
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