Oil sands, prices bolster Canadian energy results
By Jeffrey Jones
CALGARY, Alberta (Reuters) - Strong prices for oil sands-derived crude bolstered quarterly earnings at Imperial Oil Ltd (IMO.TO: Quote), Cenovus Energy Inc (CVE.TO: Quote) and other Canadian energy producers, although snags elsewhere in their operations marred some of the results.
Imperial and Cenovus rose on Thursday after they reported third-quarter profits, with at least some of the stocks' gains attributed to a sharp jump in oil prices following an EU deal on Greek debt with private lenders.
Canadian Oil Sands Ltd COS.TO, reported its quarterly results after market, but its shares also rose as oil prices jumped 4 percent to $93.96 a barrel, the highest closing price since early August.
Nonetheless, prices for synthetic crude processed from the Alberta tar sands were up by a quarter versus a year earlier, due partly to shutdowns earlier in the year at several facilities. Prices for raw bitumen, which is also sold to refineries, were also higher, though not by as much.
"Still, in the overall scheme of things, bitumen producers were relatively happy with price realizations relative to the past. It is still quite healthy," FirstEnergy Capital Corp analyst Michael Dunn said. "Plus we've seen a recovery here, so third-quarter prices were good and current prices are good."
Canada's oil sands, the world's third-largest crude source, are the subject of intense environmental debate in the United States as Washington decides whether to allow the massive Keystone XL pipeline to Texas from Alberta to proceed.
The resource is Canada's most lucrative export, and already makes up a major part of U.S. oil supply as it competes with domestic oil and crude from the Middle East and elsewhere.
In the quarter, synthetic crude sold for a premium to U.S. benchmark West Texas Intermediate, while heavy oil was discounted, albeit by a smaller margin than last year. Continued...