(Bloomberg) – The energy match of Canada may have temporarily designed a disaster in the trade war with the US, in which the orders of President Donald Trump strain the crude oil in a lower rate and possibly allow producers to avoid taxes on some shipments.
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The rate of 10% on the American import of Canadian energy is less than half of the 25% percentage for which the industry had braced, a movement of the White House in motion was intended to rise to the rises of gasoline and heating to limit oil prices. The formulation of the order also means that some analysts believe that Canadian producers are not burdened on shipments that simply pass through the US, so that they can export considerable volumes for the Gulf Coast without fine.
“I would characterize this as annoying and offensive, but not cataclysmic for energy producers,” said Eric Nutall, a partner and senior portfolio manager at NinePoint Partners in Toronto, in an E -mail.
Canadian Heavy Crude’s discount on the American benchmark oil will probably increase to $ 16 to $ 17 per barrel, of $ 13 for rates, he said. The damage to producers can also be reduced, because some of the added costs are probably absorbed by American refineries, especially those in the midwest that are most dependent on Canadian oil, said Nutall.
Even with the buffers, rates threaten to disturb a North -American energy market that has been integrated strongly for decades. Canada sends almost all its about 4 million barrels per day oil export to the US, making it America’s largest foreign source of crude oil.
American refineries benefit from the steady streams of relatively cheap, heavy Canadian crude oil that can be converted more profitably into fuel than the light oil produced in their own country. The American Midwest, the home base of 23% of the refining capacity of the country, depends in particular on Canadian supplies sent via pipeline and has limited ways to gain access to alternatives.
The hit to light raw figures from the best oil -producing province of Alberta in Canada can also be considerable because they compete with abundant American stocks of similar oil. Almost half of Alberta’s oil is light, conventional crude oil or oil teeth bitumen that has been upgraded in light synthetic oil. The discount for light Canadian figures can broaden by $ 7 per barrel, said Susan Bell, a Rystad Energy Analyst. The discount on synthetic crude oil is currently at $ 3.50 per barrel.