SAGD project pipelines in northern Alberta. Image: Deborah Jaremko/JWN The National Energy Board has put a number on the market challenge that caused the price of Canadian heavy oil to drop to a record low last fall: 350,000 bbls/d. That’s how much more oil was being produced than the available pipeline capacity to export it out of the basin in September 2018, the NEB estimates in a new report. Driven by new oilsands volumes and growth in conventional light oil, the NEB said total production in western Canada reached 4.30 million bbls/d in September. Meanwhile, takeaway capacity on existing pipeline systems is estimated at 3.95 million bbls/d. The situation as 2018 approached its close was made worse by U.S. refinery maintenance, including at BP’s Whiting Refinery in Indiana, the largest single consumer of Canadian heavy crude. Western Canadian Select hit a record low of US$13.46/bbl in November, more than US$40/bbl less than West Texas Intermediate. The “normalized” WCS discount, based on quality and location, is estimated at about US$15/bbl. The realized pricing situation is expected to improve somewhat a result of Alberta’s mandatory 325,000-bbl/d oil production curtailment, which is now in effect, as well as the province’s commitment to […]