The Canadian Crude Index™ (CCI™) was created by Auspice and represents a simple, transparent and liquid benchmark for oil that is produced in Canada.
The CCI™ Reference Price represents the fixed price in USD per barrel for the three to four contract months that contribute to the index (see holdings below).
CCITM Reference Price
$81.76 ↑ 123
The CCI™ Excess Return Index reflects the returns that an investor would expect to receive if they held the contracts that make up the CCI™ Reference Price and rebalanced them each day.
CCITM Excess Return Index
1015.1 ↑123 +2.0%
Current CCITM Holdings
BACKGROUND FACTS ON CANADIAN OIL
- Canada has the third largest oil reserves in the world (CAPP, 2014). Over 90% of these reserves are located in Western Canada (IHS CERA, 2013) and are some of the most reliable sources of oil in the world.
- Western Canadian Select (WCS) is the dominant grade for heavy sour physical crude oil in Alberta (Alberta Energy, 2013). Currently, WCS trades at a discounted price to Western Texas Intermediate (WTI). See Chart 1.
- The landlocked location and transportation constraints contribute to the WCS price discount. As the seventh biggest producer globally, efforts are being made to find alternative transportation mechanisms.
- Increased accessibility to global markets could increase the demand of WCS. Other heavy sour crudes, like the Maya (Mexico) blend (Alberta Government, 2013), currently trade at a premium to the WTI.
Who should invest?
The CCI was created to give speculators a tool to get direct exposure to Canadian Crude Oil. Prior to this it was almost impossible for a retail investor to get this type of exposure.
Why speculate in Canadian Crude?
The two most common reasons to speculate are:
- To gain exposure to Canadian Crude oil without the business risks of buying specific resource equities.
- To speculate on the differential between Canadian Crude and WTI.