Sask. Energy Minister says oil price differential could cost hundreds of millions
The Canadian price of oil has dropped below $20 per barrel, widening the differential between the price of Canadian and American crude to $52.
The Western Canada Select (WCS) price fell to $19 per barrel on Thursday, well below the West Texas Intermediate (WTI) price, $71 per barrel.
Saskatchewan Minister of Energy and Resources Bronwyn Eyre said the province has been watching the price differential widen for the past several weeks.
“That of course has an immediate impact on jobs and livelihoods and families in this province,” Eyre said.
If a $52 price differential stretched through an entire year, Eyre said the province estimates it would cost Saskatchewan $500 million in resource royalties and cost the sector upwards of $7.4 billion.
“People of course are very worried of course in terms of impact to their jobs, and families to their livelihoods if we can’t manage, and the federal government can’t manage to build that pipeline, build more pipelines,” Eyre said.
While the province does formulate its price of oil budget projections based on the WTI price, Eyre said a gap this wide will have an impact on Saskatchewan’s coffers.
“You can’t always forecast these kinds of numbers. This is market forces and this is differential that comes about as a result of not being able to get product to tide water,” she said. “The lack of pipelines is having a massive effect and all transportation congestion that occurs as a result.”
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