Buy Canadian Heavy Oil Producers Part 2
Please read part 1: Buy Canadian Heavy Oil Producers
Since the publication of our WCTW on Jan 30 notifying all subscribers to buy Canadian heavy oil producers, several things have happened.
The market is finally starting to acknowledge that WCS-WTI narrowing is a real possibility with the latest price move.
Mexico's oil refinery start-up does not appear to have any delays.
TMX start-up looks real and on schedule.
SPR was the main cause of the widening in WCS-WTI despite the US crude storage building.
Many investors pondered over the course of 2022 as to why WCS-WTI spreads kept widening. And at the time, we had pointed out that the US SPR release was the main reason. It was not pipeline capacity issues that caused the spreads to widen (like it did in 2018).
Fast forwarding to today, WCS trades at -$16.40/bbl and quickly narrowing.