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The price crisis affecting both heavy and light Canadian oil is “staggering,” says the chief executive of Whitecap Resources Inc., who warned that the situation will get even worse next year when the oil hedging strategy for many companies starts to fade. Grant Fagerheim, president and CEO of the Calgary-based light oil producer, told BNN Bloomberg Thursday that Whitecap has hedged for fluctuations in the price of oil until the end of December. “We have a $3.50 differential versus what settled for the month of December at a differential price of US$35 … a tenfold increase from what the historical norm is,” Fagerheim said, referring to the price gap between West Texas Intermediate, the North American crude benchmark, and Edmonton light crude. “So, through to the end of December, we’re pretty well-hedged at this particular time. Going forward in 2019, now we’re into unchartered territory for most of the producers out here.” Fagerheim said producers’ inability to ship light oil to the U.S. Midwest, because of a lack of pipelines is penalizing all Canadians, not just Albertans. “These are Canadian resources that should be extracted at world prices and sold at world prices, and they’re not,” Fagerheim said. “We’re […]
