Oil Prices & The Canadian Dollar

Ryan Bushell - June 29, 2015

As you can see from the prices below a 15-20% drop since 2013 for Canadian producers is hardly the same as the ~50% drop that most people assume.  Additionally the ~35% drop for US producers is clearly worse for marginal shale economics especially when you consider the fact that US royalties are usually flat where as Canadian royalties tend to float up and down with prices.  The increase in well productivity and drop in service costs for new wells versus 2-3 years ago mitigates the commodity price drop significantly as well such that when you apply this analysis back to 2012 you can see that Canadian producers are arguably better off.

June 2015

Grade

USD Price

CAD Price

USD Differential

WTI

$60.23

$0.81

CAD/USD

Synthetic (upgraded  bitumen)

$60.88

$75.16

0.65

Edmonton Par           (CAD Light)

$60.16

$74.27

-0.07

WCS (CAD Heavy)

$49.88

$61.58

-10.35

                                                                                            (Source: Thomson Reuters)

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