The Basic Idea
WTI is a widely watched light crude benchmark. Western Canadian Select is a heavy crude benchmark linked more closely to many Alberta barrels.
The differential is the gap between those prices. A wider gap means Alberta heavy crude sells at a larger discount, which can reduce royalty and tax revenue relative to a narrow-spread environment.
Why It Moves
The differential can widen or narrow because of refinery demand, pipeline constraints, storage conditions, transportation costs, quality differences, and broader market stress.
It can move independently of WTI, so a high WTI price does not always mean the provincial fiscal position improves as much as the headline oil price suggests.
How The Terminal Handles It
The terminal models the light-heavy differential separately from WTI. A wider differential is treated as negative for the budget balance.
This lets users test cases where global oil prices rise but Alberta-specific pricing remains pressured.