Canada crude-Grades fall with refinery work, tight pipelines

Fri Nov 2, 2012 12:36pm EDT
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* December WCS quoted at $34/bbl under WTI

* Synthetic quoted at $8.75/bbl under WTI

* BP Whiting, pipeline apportionment weigh on prices

CALGARY, Alberta, Nov 2 (Reuters) - Canadian crude prices tumbled to seven-month lows on Friday as a major U.S. Midwest refinery began a lengthy unit outage and export pipeline capacity remained tight, market sources said.

Western Canada Select heavy blend for December delivery last sold for $34 a barrel under benchmark West Texas Intermediate, down $2.50 a barrel from Thursday's settle, according to Shorcan Energy Brokers. It was the deepest discount for the widely traded crude since March 13.

Light synthetic for December was quoted at $8.75 a barrel under WTI, compared with $5.90 a barrel under the day before.

Although the impact of super storm Sandy was being felt on in U.S. East Coast petroleum market, Canadian crudes were much more affected by U.S. Midwest fundamentals, trade sources said.

BP Plc was starting major maintenance this week at its 337,000 barrel a day Whiting, Indiana, refinery. The work, on the largest crude unit at the plant, is expected to wrap up in the second half of next year, and reduce production by about half for the duration.

The work is part of a $4 billion upgrade that will allow the refinery to process more Canadian heavy crude.

Meanwhile, Enbridge Inc rationed space for this month on five U.S. Midwest pipelines after nominations exceeded available space.

TransCanada Corp is also working with its shippers to determine how to deal with undelivered volumes stemming for an unplanned five-day outage on its 590,000 bpd Keystone pipeline last month.