UPDATE 1-Canadian heavy crude slumps to lowest in at least a decade
(Updates with Flanagan South restart, price action)
By Nia Williams
CALGARY, Alberta Aug 12 (Reuters) - Heavy Canadian crude slumped to its lowest level in at least a decade on Wednesday after Enbridge Inc closed two of its main pipelines in the United States because of a leak, piling fresh misery on Canadian oil companies that are close to producing at a loss.
Western Canada Select heavy blend crude for September delivery last traded at $20.75 per barrel below the West Texas Intermediate benchmark, according to Shorcan Energy brokers, having settled at $19.80 per barrel below on Tuesday.
Earlier in the session it hit $21.75 per barrel below WTI, the widest differential since August last year.
That pushed the outright price of Canadian heavy crude to around $22.50 a barrel, a level at which some companies will struggle to cover the cost of production, blending and transportation.
It was lower than the 2008 trough of $24.62, according to one trading source, when U.S. benchmark crude plunged to $32 a barrel as a result of the global financial crisis.
Enbridge shut down its Flanagan South and Spearhead pipelines in the U.S. Midwest late on Tuesday.
The company said it expects to restart the 600,000 barrel per day Flanagan South line later on Wednesday or on Thursday, but it did not know how long the adjacent Spearhead line would remain shut. Continued...