Benchmark oil prices are not in record territory and continue their habit of bouncing around on a day-to-day basis, but they are having a relatively good year so far.

The West Texas Intermediate (WTI) benchmark averaged 78.70* in June. This was about the same as in May and just a few cents shy of the year-to-date (YTD) average of 78.76.

The Western Canadian Select (WCS) benchmark averaged 64.35 in June which was also quite close to the YTD average of 63.09.

So far this year, the price difference in favour of WTI has averaged 15.67.

A long list of variables affect the differential, but there is an expectation that the added transportation capacity provided by the Trans Mountain Expansion Project (TMX) will either keep the differential from growing as large as it otherwise would or reduce it over time.

We will have a better sense of the full impact of TMX on the differential once we have more data on hand. (The expanded pipeline’s commercial operations only began on May 1 of this year.)

In terms of what’s next for oil prices, the YTD figures are closely tracking our forecast for WTI to average 78 in 2024 and WCS to average 63 and we don’t see any new developments that would change our forecast at this stage.

With that said, our forecast assumes that OPEC+ continues to keep a lid on supply, that international conflicts do not cause a major supply disruption, and that the global economy continues to pull itself out from under the weight of high inflation and high interest rates.

*All price data are in U.S. dollars per barrel and are based on the value of front-month futures contracts traded on the New York Mercantile Exchange (NYMEX).

Answer to the previous trivia question: The Wall Street Journal issued its first edition on July 8, 1889.

Today’s trivia question: In what year was the horror film “I Know What You Did Last Summer” released?