Canada crude - Prices rise as oversupply worries abate

Wed May 15, 2013 6:57pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

CALGARY, Alberta May 15 (Reuters) - Canadian crude prices strengthened on Wednesday, rising for a third straight session as some market concerns about oversupply eased.

Western Canada Select heavy blend for June delivery last traded at $17.25 per barrel below the West Texas Intermediate benchmark, according to Shorcan Energy Brokers.

That compares with a settlement price on Tuesday of $17.60 per barrel under WTI.

The price of heavy oil has climbed from around $40 per barrel under WTI at the start of the year, when surging production, tight pipeline capacity and a series of refinery outages were blamed for the slump.

"What it really comes down to is the ability to move heavy and light crude out of Canada and the U.S. Mid West is improving," said Martin King, an analyst at FirstEnergy Capital.

TransCanada Corp's 590,000 barrel per day Keystone oil pipeline resumed operations on Wednesday following a one-day shutdown.

The company said it was doing routine maintenance on Wednesday and Thursday but there were no operational issues with the pipeline, which carries Alberta crude between Illinois and the Cushing, Oklahoma, storage hub.

King said a seasonal uptick in refinery activity and news of flows beginning at BP's 240,000 barrel per day crude unit at its refinery in Whiting, Indiana, were also helping demand for Canadian crude.

Light synthetic crude from the oil sands last traded at a premium of $1.00 per barrel over WTI, up from a settlement price of $0.65 per barrel over the benchmark on Tuesday.