CALGARY, Alberta (Reuters) - Canadian synthetic crude differentials dipped on Monday to trade at a discount to U.S. crude for the first time since December as the Syncrude project in northern Alberta ramped up production.
The 350,000 barrel per day plant, one of Canada’s largest single sources of synthetic crude, slashed output after a fire in March damaged the facility and forced Syncrude to bring forward planned maintenance.
Last week majority-owner Suncor Energy said shipments had resumed at 140,000 bpd and the plant would ramp back up to full capacity in June.
Returning supply weakened synthetic prices, which last traded at 15 cents per barrel below the West Texas Intermediate benchmark, according to Shorcan Energy brokers.
That compared with a settle on Friday of 15 cents per barrel over WTI.
The discount on Western Canada Select heavy blend crude for June delivery widened to $9.90 per barrel below WTI, compared with Friday’s settle of $9.65 a barrel under the benchmark.
Heavy crude differentials had also tightened during the Syncrude outage, because some oil sands producers rely on synthetic crude for mixing with tarry bitumen to create a heavy blend that can flow through pipelines.
Reporting by Nia Williams; Editing by Matthew Lewis