* Dec WCS trades at $41.00/bbl below WTI
* Dec synthetic trades at $15.00/bbl below WTI
CALGARY, Alberta, Nov 6 (Reuters) - Canadian heavy crude prices steadied on Wednesday after a recent fall to 10-month lows, but looked likely to remain under pressure from limited pipeline capacity and unplanned refinery outages.
Western Canada Select heavy blend for December delivery last traded at $41.00 per barrel below the West Texas Intermediate benchmark, according to Shorcan Energy brokers.
That was slightly higher than Tuesday’s settlement of $41.50 per barrel below the benchmark, which was the widest differential since January.
Pipeline company Enbridge Inc rationed space on additional pipelines in November, meaning producers are unable to ship as much crude as they would like to market and oil is getting stranded in Alberta, driving prices lower.
Meanwhile, fires at Citgo Petroleum Corp’s 174,500 barrel per day Lemont, Illinois, refinery and the 130,000 bpd Co-op refinery in Regina, Saskatchewan, have reduced demand for crude.
Delays in starting up a new coker that would process more heavy crude at BP PLC’s 405,000 bpd Whiting, Indiana, refinery and increasing production at Imperial Oil’s 110,000 bpd Kearl oil sands project also mean supply is outweighing demand.
Suncor Energy Inc, Canada’s largest energy company, said on Wednesday its average oil sands production rose 2.7 percent month-on-month to 375,000 bpd.
David Bouckhout, senior commodities analyst at TD Securities in Calgary, said he expected the differential between WCS and WTI to narrow only modestly into the end of 2013.
“In our view, a more material narrowing will not come until there is evidence of heavy oil being processed at BP Whiting’s new coker, and we see the return of refining utilization from both planned and unplanned events,” he wrote in a note.
However, the eventual removal of pressure restrictions on the Enbridge Mainline network next year will add an extra 200,000 bpd of capacity and help strengthen heavy crude prices.
Bouckhout said TD Securities expected to see WCS trading between $30 and $35 per barrel below WTI in the early days of 2014, narrowing further to the mid-$20s below WTI by mid-2014.
By 2015 he said the differential should return to more ‘normal’ levels around $20 per barrel below the benchmark.
Light synthetic crude from the oil sands for December delivery last traded at $15.00 per barrel below WTI, compared with a settlement price of $15.25 per barrel below the benchmark on Tuesday.