Canada crude-Transport constraints pressure heavy grades

Wed Jan 16, 2013 4:03pm EST
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* 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.