Canada’s benchmark heavy crude oil has risen above $100 U.S. per barrel for the first time since 2008 as the American government debates banning imports of Russian oil.
Western Canadian Select crude oil rose $2.70 U.S. to $100.10 U.S. a barrel in Calgary trading, according to NE2 Group data.
The global oil market had its biggest daily swing ever yesterday (March 7), with Brent crude oil, the international benchmark, surging to nearly $140 U.S. a barrel in London trading, after the U.S. said it was considering a ban on Russian crude oil imports.
Heavy Canadian crude is a potential substitute for Russian fuel oil that’s shipped to the U.S.
Heavy Canadian crude oil typically trades at a discount to West Texas Intermediate (WTI) of more than $10 U.S. to $15 U.S. a barrel due to its heavy nature and the fact that it’s produced in landlocked Alberta, requiring pipeline or rail transportation to U.S. refineries.
The current rally in oil prices is helping Alberta, which holds the world’s third-largest crude reserves, to reduce its budget deficits and revive an economy that has been struggling since the energy market crash of 2014.
