Welcome to the tighter is better edition of Oil Markets Daily!
As we've highlighted in the past, one of the many consequences of much tighter US crude storage fundamentals going forward will be first reflected in physical spreads and different crude qualities. With Alberta announcing a production curtailment to the end of 2020, WCS-WTI spreads are starting to compress meaningfully.
Source: CME
The 2020 spreads have started to compress from $22+ to just around ~$17/bbl. Our estimate shows that, with the market still illiquid for the futures curve, as the months roll over, we should