Canada crude -Prices hold near recent multi-month highs

Tue Jan 7, 2014 5:52pm EST
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* February WCS trades at $18.55/bbl below WTI

* February synthetic trades at $2.50/bbl above WTI

CALGARY, Alberta Jan 7 (Reuters) - Canadian cash crude prices held within sight of recent highs on Tuesday, supported by concerns about cold weather affecting production and increasing demand from some U.S. refineries.

Western Canada Select heavy blend for February delivery last traded at $18.55 per barrel below the West Texas Intermediate benchmark, according to Shorcan Energy brokers.

That compares with a settlement price of $18.90 per barrel below WTI on Monday, which was the narrowest differential since late August.

Light synthetic crude from the oil sands last traded at $2.50 per barrel above WTI, compared with a four-month-high settlement price on Monday of $2.80 per barrel above the benchmark.

Market players in Calgary said a number of factors had contributed to the recent rally in Canadian crude prices. Heavy grades have risen steadily since hitting more than $40 per barrel below WTI in early November.

Frigid temperatures around Fort McMurray, the production hub for Canada's vast oil sands, prompted some traders to bet that output will slow, even though temperatures around -40C are not unusual for northern Alberta in January.

"Winter is always a problem to some extent, some years more so than others," one crude trader said.   Continued...