Canada crude-Heavy spread narrows with delayed Kearl start

Wed Jan 2, 2013 5:29pm EST
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* February WCS at $33/bbl under WTI

* February synthetic $1.75/bbl over WTI

* Kearl oil sands output seen still a few weeks away

CALGARY, Alberta, Jan 2 (Reuters) - Canadian heavy crude prices strengthened on Wednesday as production from Imperial Oil Ltd's new C$10.9 billion ($11 billion) oil sands project appeared to be still a few weeks away.

Western Canada Select heavy blend for February delivery last sold for $33 a barrel under benchmark West Texas Intermediate, compared with $33.25 under WTI on Monday, according to Shorcan Energy Brokers.

Last month, WCS had at times sold for around $40 under WTI as traders weighed the impending start-up of Imperial's 110,000 barrel-a-day Kearl oil sands project against a backdrop of already-tight pipeline export capacity.

Imperial said on Wednesday that output from the venture was possible in the coming weeks, after a delay from the initial target of the end of 2012.

Meanwhile, light synthetic crude for February was last quoted at $1.75 a barrel over WTI, compared with 50 cents a barrel under on Monday.