Canada is producing more oil than it can handle

[thackney]

Canada is producing more oil than it can handle
https://www.rt.com/business/447928-canada-oil-production-volume/

Western Canada is producing 365,000 bpd more crude oil that current pipeline capacity can handle, a new report from the National Energy Board has revealed.

According to the authority, as of September, Western Canada produced a daily average of 4.30 million barrels of crude, while pipeline capacity stood at 3.95 million barrels per day.

Alberta, the largest oil producer in Canada, has turned to oil trains to offset the pipeline capacity shortage, and in November Premier Rachel Notley announced that the province will buy an additional 120,000 bpd in oil train capacity, to begin operating this year. It will reach full capacity in 2020....

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Western Canadian Crude Oil Supply, Markets, and Pipeline Capacity
https://www.neb-one.gc.ca/nrg/sttstc/crdlndptrlmprdct/rprt/2018wstrncndncrd/index-eng.html

[IsailedawayfromFR]

During my career in the oil industry, I always considered this is the type of problem to have - tanks not big enough to handle oil produced, or in this case, pipelines.

[Smokin Joe]

During my career in the oil industry, I always considered this is the type of problem to have - tanks not big enough to handle oil produced, or in this case, pipelines.

It is, until the discounts hit. Bakken oil had a $30/bbl discount, even though it was every bit as good as WTI (42 API, low sulfur), at least until the train depots were built and the DAPL went through.

[thackney]

It is, until the discounts hit. Bakken oil had a $30/bbl discount, even though it was every bit as good as WTI (42 API, low sulfur), at least until the train depots were built and the DAPL went through.

Exactly.  Nobody wants to sell at below market prices, because you cannot get to the market.

[IsailedawayfromFR]

Exactly.  Nobody wants to sell at below market prices, because you cannot get to the market.

Exactly.  That is how a midstream company is encouraged to actually build a pipeline, as there is a margin spread there and money to be made within it.

I could turn what you said around and say no midstream company wants to transport crude if its income was below costs either.