Liquidity improves in Canadian heavy oil derivatives

Trading in derivatives linked to Western Canadian Select (WCS) heavy crude oil has jumped in the past few years, giving the country's producers improved opportunities to hedge. But the lack of a unified WCS price index has made it difficult for liquidity to build around a single contract. Alexander Osipovich reports

Canada is playing an increasingly important role in the North American energy market. The country is the top exporter of petroleum to the US, and with estimated proven reserves of 173.6 billion barrels – most of which lie in Alberta's oil sands – it has the third-largest reserves in the world, after Saudi Arabia and Venezuela, according to Oil & Gas Journal. Yet when it comes to oil derivatives, Canada punches beneath its weight. When oil firms in Alberta have sought to hedge their production