Canada crude-Transport constraints pressure heavy grades
* February WCS quoted at $37/bbl under WTI * February synthetic $0.15/bbl over WTI * Imperial Kearl project has yet to start commercial output CALGARY, Alberta, Jan 16 (Reuters) - Canadian heavy crude oil prices weakened on Wednesday in thin trade as pipeline transport constraints and expectations of new production weighed on the market. Western Canada Select heavy blend for February delivery last sold for $37 per barrel below the West Texas Intermediate benchmark, compared with a settlement of $36.75 under on Tuesday, according to Shorcan Energy Brokers. Discounts have narrowed from the $40-plus range in recent days on some short-covering, but remain much deeper than historical averages, market sources said. Last week, WCS faced increased pressure after Enbridge Inc imposed mid-month apportionment on three of its Canada-United States pipelines, squeezing already tight pipeline capacity. Industry sources have also said prices have weakened on expectations of the upcoming start-up of Imperial Oil Ltd's 110,000 barrel a day Kearl oil sands project. An Imperial spokesman said on Wednesday that commercial production at the northern Alberta site had yet to start. On Tuesday, however, Phillips 66 restarted a crude unit at its 356,000 bpd Wood River, Illinois, refinery that had been shut since the weekend, resuming oil demand. Light synthetic crude for February, meanwhile, was quoted at 15 cents above WTI, down 60 cents from Tuesday.
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