October 1, 2015 / 10:38 PM / 2 years ago

CANADA CRUDE-Synthetic rises on Enbridge Line 9 approval

3 Min Read

* Nov synthetic trades at $1.00/bbl over WTI

* Nov WCS trades at $14.50/bbl below WTI (Updates prices, adds quote)

By Nia Williams

CALGARY, Alberta, Oct 1 (Reuters) - Canadian light synthetic crude and North Dakota Bakken crude for November delivery strengthened on Thursday after Enbridge Inc received approval from regulators to open its newly-reversed Line 9 crude pipeline.

Line 9 will ship 300,000 barrels per day of mostly light North American inland crude from Sarnia, Ontario, to Montreal, Quebec, displacing costlier barrels imported from overseas. The line used to flow in the opposite direction, taking imported crude to Ontario.

Enbridge has not yet said when the pipeline will start operating but traders said there was demand for light crude in anticipation of the line being filled in the next month or so.

Light synthetic crude from the oil sands last traded at $1.00 per barrel above the West Texas Intermediate benchmark, according to Shorcan Energy brokers, up from 10 cents per barrel below the benchmark on Wednesday.

Bakken crude delivered to Clearbrook, Minnesota, traded at 65 cents per barrel below WTI, tightening from $1.70 per barrel below the benchmark the previous day.

"Everyone is talking about Line 9 and that's the driving force behind the demand," said one Calgary-based crude trader.

Line 9, initially expected to start up late last year, was delayed after Canada's National Energy Board requested more data on valve placements at water crossings and ordered hydrostatic tests.

RBC Capital Markets analyst Michael Tran said the start-up of the reversed line, which links into the existing Enbridge pipeline system, would increase market penetration for Canadian producers by enabling more domestic barrels to reach refineries in Quebec.

"The reversal will be particularly important for Western Canadian light crude given that there is limited further room for growth for exporting lights to the United States," Tran said.

Western Canada Select heavy blend crude for November delivery last traded at $14.50 per barrel below WTI, according to Shorcan Energy brokers.

That compares with a settlement price on Wednesday of $13.95 per barrel below the benchmark. (Additional reporting by Elizabeth Hampton in Houston; Editing by Diane Craft)

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