Prices for Canadian crude oil continued to fall behind the United States this quarter, according to accounting firm Deloitte Canada.
A report from the firm said the difference between West Texas Intermediate (WTI) and Edmonton Light oil prices widened to US$7.32 per barrel in January, an 86 per cent increase over the average of US$3.93 per barrel in the fourth quarter of last year.
Deloitte partner Andrew Botterill said there’s less room for Canadian crude in American refineries, which are running at a 13-year high of more than 90 per cent capacity.
Botterill also said the lower relative pricing is partly caused by pipeline capacity constraints and the rise in production.
The report suggests that price differentials will begin to return to more normal levels as the Sturgeon Refinery northeast of Edmonton starts full operation later this year, potentially alleviating light crude exports.
The announcement by the Alberta government to support partial refinery upgrading by 2019 could also help alleviate price volatility as producers would have addition domestic selling options and free up space for crude export to the U.S.
The quarterly forecast from the firm predicts that oil prices will hover around US$60 a barrel for the rest of the year.
*With files from the Canadian Press