Canada crude - Heavy prices improve with better market access
* March Western Canada Select last at $31.75/bbl under WTI
* March synthetic at $0.75 over WTI
CALGARY, Alberta Jan 30 (Reuters) - Canadian heavy oil prices improved on Wednesday on lighter pipeline restrictions and improving demand.
Western Canada Select heavy blend for March delivery last traded for $31.75 per barrel under the West Texas Intermediate benchmark, according to Shorcan Energy Brokers. That compares with the day prior settlement price of $33.00 per barrel under WTI.
Tight pipeline capacity and refinery maintenance slashed the price of Canadian heavy oil in January, pushing the discount to more than $40 per barrel under WTI earlier this month.
The weak pricing led to political turmoil in Alberta, which relies on revenue from oil and gas production for nearly a third of its revenue. Premier Alison Redford last week said the province faced a C$6 billion ($6 billion) budget shortfall because of the low prices.
But more pipeline space is available in March, allowing more crude to reach the U.S. Midwest. Enbridge Inc said earlier this week that its Line 5, which carries 491,000 barrels per day to refineries in Michigan and Ontario, would be apportioned by 5 percent next month after cutting back nominated shipments by 12 percent for January, though restrictions on other lines would remain about the same.
There are few refinery outages currently cutting into demand. Flint Hills has closed the 24,000 bpd coker unit at its Pine Bend refinery in Minnesota, Genscape reported.
Imperial Oil Ltd on Tuesday reported an operational upset at its 121,000 bpd Sarnia, Ontario, refinery. The company said it is working to return the facility to normal operation but did not specify any production impact from the incident.
Synthetic crude for March delivery last traded at a premium of 75 cents per barrel above WTI, down from a settlement price on Tuesday of 80 cents per barrel above the benchmark.
© Thomson Reuters 2017 All rights reserved.