Crude imitation

Hedging Canadian heavy crude oil is difficult: unlike Canadian light crude, ithas no closely matching price benchmarks. Trading basis differentials is onesolution, but help may be at hand from another quarter. By JoeMarsh

Like just about everyone else hedging oil, Canadian oil producers and refinerssuffered big hedging losses last year due to the huge rise in the price of crude.But they have more than just price volatility to worry about. Producers lookingto hedge heavy crude simply do not have a product with a liquid market and similarprice movement to match it against. There are various ways of tackling the problem – noneof them totally satisfactory. But help could be on the horizon, involving thepossible