November 10, 2016 / 10:57 PM / in 9 months

Synthetic weakens toward multi-month lows

Storage tanks, holding crude and refined oil, at the Kinder Morgan tank farm are pictured in Burnaby, British Columbia October 6, 2014.Ben Nelms

CALGARY, Alberta (Reuters) - Canadian synthetic crude differentials tested recent lows on Thursday as a result of healthy supply from northern Alberta's oil sands.

Light synthetic crude from the oil sands for December delivery last traded at $2.10 per barrel below the West Texas Intermediate CLc1 benchmark, according to Shorcan Energy brokers, deepening from a discount of $1.85 per barrel below WTI on Wednesday.

Synthetic crude hit a 14-month low of $2.20 per barrel below WTI on Oct. 31, according to Reuters data, amid thin trading volumes in the illiquid month-end period.

Prices have been under pressure this month as Canadian Natural Resource Ltd's 45,000 barrel per day Horizon expansion project ramped up synthetic crude output.

Last week the company said Horizon is currently producing 175,000 bpd and would "imminently" meet its targeted production rate of more than 182,000 bpd.

Output from the Syncrude oil sands project, majority-owned by Suncor Energy (SU.TO), has also been strong since it returned from wildfire-related outages earlier in the year.

Western Canada Select heavy blend crude for December delivery last traded at $15.30 per barrel below the West Texas Intermediate benchmark, according to Shorcan Energy brokers, weakening from Wednesday's settle of $15.25 per barrel below WTI.

Reporting by Nia Williams; Editing by James Dalgleish

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