CALGARY, Alberta (Reuters) - Light synthetic crude prices rallied further on Thursday after Syncrude Canada cut its July production forecast by 1.1 million barrels, three trading sources said, with the plant running below full capacity for a fifth straight month.
The company told customers late Wednesday and Thursday that it was cutting its original forecast of 9.5 million barrels by 11.5 percent, or around 1.1 million barrels, to 8.4 million barrels.
Syncrude spokesman Will Gibson declined to comment on the cuts. Previously, Suncor Energy (SU.TO), the plant’s majority owner, said the facility would be back to full capacity by mid-July.
The cuts came after months of reduced output at the northern Alberta oil sands plant due to a mid-March fire at its Mildred Lake upgrader.
The continued cuts have propped up the light synthetic crude market for months, and had a knock-on effect on Canadian heavy crude, as some producers mix “syncrude” with heavier bitumen to create a blend that can flow through oil pipelines.
Trading sources added that at least two other local Canadian crude grades have been affected, although they could not be confirmed immediately.
Synthetic prices for July delivery traded at $2.20 a barrel over the West Texas Intermediate benchmark, up from a settlement of $1.55 the previous day.
Synthetic crude for August last traded at 85 cents per barrel over WTI, unchanged from Wednesday’s settlement of 85 cents.
Western Canada Select heavy blend crude for August delivery last traded at $9.90 per barrel below WTI, vs $9.75 a barrel below WTI the previous day.
Reporting by Catherine Ngai and Nia Williams in Calgary; Editing by Jonathan Oatis