Updated June 2023
Figure S1.4 shows historical and forecast prices for Western Canadian Select (WCS).
Summary
The average annual price of WCS in 2022 was US$76.01 per barrel (bbl), an increase of 38 per cent from 2021.
The base-case price for WCS is projected to drop to US$59.00/bbl in 2023, rising to US$65.00/bbl in 2024 and reaching US$67.77/bbl by 2032.
The low- and high-price cases for WCS align with the assumption for the West Texas Intermediate (WTI) forecast.
The low-price case forecast for WCS is US$31.73/bbl in 2023, US$34.52/bbl in 2024, and US$32.29/bbl by 2032.
The high-price case forecast for WCS is US$109.71/bbl in 2023, US$122.38/bbl in 2024, and US$142.24/bbl by 2032.
The WCS price is expected to follow the WTI trend but remains lower due to quality differences and transportation costs.
In 2022
Price differentials: The WTI-WCS price differential widened from US$13.06/bbl in 2021 to US$18.22/bbl in 2022. The differential rose in 2022 due to the release of supply from the U.S. Strategic Petroleum Reserve, increased competition from other heavy crude grades from Mexico, unplanned U.S. refinery outages, and elevated natural gas prices reducing coking margins for large complex U.S. refineries.
Crude-by-rail: The volume of crude oil moved by rail decreased by 2 per cent from 53 million barrels in 2021 to 52 million barrels in 2022.
Forecast for 2023 to 2032
Price differentials and market access: In 2023, the WTI-WCS price differential is projected to average US$18.00/bbl. The differential is expected to narrow to US$14.00/bbl in 2024 following the completion of the Trans Mountain expansion. From 2024 to 2028, the price differential is expected to remain around US$14.00/bbl as the factors that would widen the differential (competition for pipeline export capacity and increased supply of crude oil globally) will be balanced by factors that narrow it (less heavy oil output from Mexico and lower natural gas prices). The WTI-WCS price differential is expected to widen in the latter years of the forecast as total oil removals reach the pipeline takeaway capacity.
U.S. Gulf Coast demand: Although the U.S. has temporarily lifted some trade sanctions on Venezuela, this new supply is expected to be offset by the end of U.S. Strategic Petroleum Reserve sales, Mexico’s plans to stop exporting crude oil in 2023, and improved margins for refining heavy oil due to lower natural gas prices. Alberta’s producers will continue to take advantage of robust demand for their heavy oil from U.S. Gulf Coast complex refineries designed for heavy crude oil feedstock.
Low- and High-Price Cases
The low- and high-price cases reflect near- and long-term volatility in the price of WCS. Both cases were estimated using the 90 per cent confidence interval. Similar factors that have been captured in the WTI forecast are expected to influence the WCS low- and high-price cases. The following additional factors affect the WTI-WCS price differential:
Low-price case:
- Production of WCS vastly exceeds storage and takeaway capacity.
- Global production of competing heavy crude oils increases.
- The U.S. lifts all trade sanctions on Venezuela and imports ramp up from the country.
High-price case:
- Pipeline and rail capacity restrictions are alleviated.
- Complex refineries increase their demand for WCS.
- Reduced supply of heavy crude oil globally.
Learn More
- Methodology
- Data [XLSX]