Canada crude - Heavy grades weaken as supply picks up
* September WCS trades at $21.75/bbl below WTI
* September synthetic trading at $2.25 premium over WTI
CALGARY, Alberta Aug 2 (Reuters) - Canadian heavy crude prices fell on Friday as a result of increased oil sands production and expectations of weaker demand from refineries.
Western Canada Select heavy blend for September delivery last traded at $21.75 per barrel below the West Texas Intermediate benchmark, according to Shorcan Energy brokers.
That compares with a settlement price of $20.10 per barrel below the benchmark on Thursday and is well below the 2013 highs of around $10 per barrel below WTI hit in June.
Market sources said supply looked plentiful as a result of Imperial Oil's new Kearl oil sands project and news that Suncor Energy Inc's July oil sands production likely rose to a record 390,000 barrels per day.
"That has grabbed the market's attention. There are signs that supply is finally picking up again," said Martin King, an analyst at FirstEnergy Capital.
Some traders said work was proceeding more slowly than expected on enabling BP Plc's 413,000 bpd refinery in Whiting, Indiana, to take more Canadian heavy crude.
Earlier this week BP said it expects a sulfur recovery unit and a hydrotreater to come on line in the third quarter, and a coker in the fourth quarter. When all units are up and running, the refinery will be able to run 80 percent heavy sour crude. Continued...