Did you know?  Canadian Oil Facts and Opportunity

Did you know? Canadian Oil Facts and Opportunity

While many of our investors, industry peers, and gawkers alike have an interest or know something about commodities, here is a little slice of something you may not know about Canadian Oil and why it is a great market to trade. While the market talks about WTI (West Texas Intermediate) almost singularly, that is like saying Copper is the only metal that matters.

Some facts:

  • Canada has the 3rd largest oil reserves in the world only behind Venezuela and Saudi Arabia and the largest foreign supplier of oil to the US at over 40% of all US imports. This is more than all OPEC producers combined and roughly 3 times what Saudi Arabia itself supplies. Almost all of Cdn oil production goes to the US.
  • There is huge global demand for heavy crude as refineries get better margins from heavy-sour crude and demand is increasing.
  • Canadian Crude is discounted from WTI primarily due to transportation constraints and costs not the grade – heavy-sour.

What does it mean?

1.   Discount Barrel:   While highly correlated to the more well-known “WTI”, due to transport costs, Canadian crude trades at a discount. The discounted price leads to higher volatility and returns (up and down) without the drawbacks of traditional leverage, creating opportunistic trading setups.

2.   Alpha Barrel: Given the scale and importance of Canadian volume to the US, this supply is not only valuable but influential on all crude pricing in North America. Including the Canadian barrel enables an opportunity to create an outperforming exposure.

 3.  Infrastructure Barrel: The CCX ETF is currently the only way to get exposure to heavy-sour crude, which is in high demand by refineries in the US and globally in the developing world.  Demand for infrastructure means demand for heavy-sour barrels and the Canadian market share meeting heavy oil demand is increasing in the US and in Asia as tide water access is developed.


Full transparency: Auspice created the Canadian Crude Index (CCI) and CCX ETF to enable access to this market. The CCX has been listed in TSX in Canada and we have partnered to launch the product in the US under the ticker UCCO (NYSE).  US Commodity Funds, who run the USO ETF, the largest oil ETF globally, began working with Auspice in 2016 on bringing this exposure to the US market.

For more information, give us a call. 



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Auspice Managed Futures Excess Return Index (AMFERI): The Auspice Managed Futures Index aims to capture upward and downward trends in the commodity and financial markets while carefully managing risk. The strategy focuses on Momentum and Term Structure strategies and uses a quantitative methodology to track either long or short positions in a diversified portfolio of exchange traded futures, which cover the energy, metal, agricultural, interest rate, and currency sectors. The index incorporates dynamic risk management and contract rolling methods. The index is available in total return (collateralized) and excess (non-collateralized) return versions.

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