Venezuela V. Canada – Battle of the Heavy Weights

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Fundamental analysis on the United States heavy crude market and the risk to Canadian imports following the latest Venezuelan market developments.

Executive Summary

• Guidance on Venezuelan crude reentering the market remains unknown, but speculation remains rampant.
• While the market focus has been on recent regulations, the similarity between Canadian and Venezuelan crude grades allowed Canada to outpace Venezuelan imports beginning in the early 2000’s.
• Fundamentals suggest there is a path for Canadian crude to continue to be the import of choice, due to its steep pricing discount at the Gulf.