April 2, 2012 / 8:28 PM / 6 years ago

Crude spreads tighten at start of May business

CALGARY, Alberta (Reuters) - Canadian cash crude prices have tightened in thin volume as pipeline restrictions have eased following a month of unplanned outages at oil sands plants in Alberta.

Light synthetic crude for May delivery last sold for $2.50 a barrel under benchmark West Texas Intermediate, close to levels at the start of last month, but a much smaller spread than the $10 under it fetched at the end of the trading window for April.

Pipeline operators have set apportionment on major export pipelines at lower levels for April than has been the case during the past several months.

Apportionment on Enbridge Inc’s (ENB.TO) 491,000 barrel-a-day Line 5 to Sarnia, Ontario, from Superior, Wisconsin, is down to 19 percent from 27 percent. Kinder Morgan KMP.N said it would move 39 percent of nominated volumes in April on its 300,000 bpd Trans Mountain pipeline to Canada’s West Coast from Alberta, compared with 30.6 percent the month before.

During March, Canadian Natural Resources Ltd’s (CNQ.TO) 110,000 bpd Horizon oil sands project restarted after a several-week shutdown.

However, a 110,000 bpd coking unit at Syncrude Canada Ltd’s oil sands operation was taken down for 30 days of unplanned work around March 9.

A few days later, Suncor Energy Inc (SU.TO) took one of two upgraders at its 350,000 bpd oil sands operation down for up to five weeks of unplanned work on a fractionator unit.

Both are expected to restart sometime in April. It is unclear when Syncrude might take another coker, known as 8-3, down for work. That turnaround was postponed due to the unplanned repairs on the other unit.

Heavy crude spreads have also tightened. May Western Canada Select heavy was quoted at $24.75 a barrel under WTI, compared with $29.50 a barrel under at the end of April business.

Overall Canadian crude spreads have widened this year as production has surged and export pipeline capacity has been tight.

Reporting by Jeffrey Jones

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