Western Canadian Select

Updated June 2024

Figure S1.3 shows historical and forecast prices for Western Canadian Select (WCS).

Summary

The average annual price of WCS in 2023 was US$58.97 per barrel (bbl), a decrease of 22% from 2022. 

In the base-case, the WCS price is forecast to rise to US$61.50/bbl in 2024, increasing to US$64.00/bbl in 2025 and reaching US$70.63/bbl by 2033.

The low- and high-price cases for WCS align with the assumptions for the West Texas Intermediate (WTI) forecast.

The low-price case forecast for WCS is US$33.92/bbl in 2024 and projected to be US$34.68/bbl in 2033.

The high-price case forecast for WCS is US$111.51/bbl in 2024 and projected to be US$143.83/bbl in 2033.

The WCS price is expected to follow the WTI trend but remains lower due to quality differences and transportation costs.

In 2023

Price differentials: The WTI-WCS price differential widened slightly from US$18.22/bbl in 2022 to US$18.65/bbl in 2023. The differential rose in 2023 due to growing oil sands supply leading to some congestion on export pipelines, slightly increased supply from Venezuelan heavy crude to the U.S. Gulf Coast, and U.S. refinery turnarounds. 

Crude-by-rail: The volume of crude oil moved by rail decreased by 17% from 52 million barrels in 2022 to 43 million barrels in 2023. 

Forecast for 2024 to 2033

Price differentials and market access: In 2024, the WTI-WCS price differential is projected to average US$14.50/bbl with the completion of the Trans Mountain Expansion (TMX) project. The price differential is expected to narrow further to US$13.00/bbl in 2025. From 2026 and onwards, the differential is expected to stay relatively stable as the factors that would widen the differential (competition for U.S. Gulf Coast demand and increased supply of crude oil globally) will be balanced by factors that narrow it (ample pipeline export capacity and access to Pacific markets).

U.S. Gulf Coast demand: Higher utilization by Gulf Coast refineries is anticipated following heavy maintenance seasons in 2023 and 2024, maintaining the robust demand for Canadian heavy crude oil. 

Pacific region demand: With the commissioning of TMX in May 2024, Alberta’s producers will be able to market more of their heavy oil to U.S. West Coast and Asian refineries, accessing higher prices for their crude oil. 

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% confidence interval. Similar factors 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:

  • Oil sands production rises more than expected and exceeds storage and takeaway capacity. 
  • Reduced throughput from complex refineries, which decreases their demand for heavy crude oil.
  • Increased supply of competing heavy crude oil globally.

High-price case:

  • Oil sands production rises less than expected and leaves ample unused storage and takeaway capacity.
  • Increased throughput from complex refineries, which increases their demand for heavy crude oil.
  • Reduced supply of competing heavy crude oil globally.

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