(Bloomberg) -- Canadian oil prices are poised to continue their slow, steady march upward next year as shipping bottlenecks ease and U.S. refiners look north to fill the gap created by decreasing output from Venezuela, according to Deloitte.
Western Canada Select at the Hardisty hub will average C$53.35 this year and climb to C$54.55 a barrel next year, according to a forecast from Andrew Botterill, a partner at Deloitte in Calgary. He estimates prices will reach C$69.15 in 2023, a 30 percent advance from this year’s average.
Driving the gains will be an increase in rail capacity that will help alleviate some of the transportation woes that have weighed on prices and higher demand from U.S. Gulf Coast refiners seeking to make up for lost production out of Venezuela, Botterill said. The prospects for increased pipeline space have also brightened recently with last week’s approval of Enbridge Inc.’s Line 3 expansion in Minnesota. Still, the threat of increased production from the U.S. may continue to hang over prices, he said.
“There’s some optimism, but it’s a little bit muted at this point in time,” Botterill said in an interview. “We’re excited that growth looks like it can actually occur and have some legs to it, but we’re still a little bit cautious.”
Alberta’s AECO natural gas benchmark is estimated to average about C$1.70 per thousand cubic feet this year and climb 18 percent to C$2 next year, according to Deloitte. The price is seen advancing to C$3.20 in 2023, an 88 percent gain from this year.
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