October 10, 2019 / 8:18 PM / a month ago

Western Canadian oil stocks rise in September: Genscape data

CALGARY, Alberta (Reuters) - Western Canadian crude inventories rose in September, data from energy information provider Genscape showed on Thursday, as crude-by-rail loadings decreased and pipeline flows dropped versus a month earlier.

Oil stocks totaled just under 26 million barrels in the week ending Sept. 27, Genscape said, increasing at a rate of nearly 37,000 barrels per day (bpd) between the first and last Fridays in September.

It was the first monthly increase in Western Canadian oil inventories since April, and will be closely watched by the government of Alberta, Canada’s main crude-producing province, which has been easing production curtailments gradually throughout the year.

Alberta imposed mandatory production cuts on oil companies from Jan. 1 this year to help ease congestion on export pipelines and drain a glut of crude in storage that had pushed the discount on Canadian crude to record levels.

“Lower outbound pipeline flows contributed to the storage rebound in September,” Dylan White, an oil markets analyst with Genscape, said in a note. “Decreased crude by rail loadings also contributed to higher inventories.”

Volumes on Genscape-monitored pipelines flowing from Canada to the United States averaged 3.59 million bpd, down from 3.68 million bpd in August.

Meanwhile, Canadian crude-by-rail loadings in September averaged 205,000 bpd, down 5,000 bpd from August. That was the lowest monthly average since April and came as a narrower spread between benchmark Brent and West Texas Intermediate crude affected rail economics for shippers.

Alberta’s government is in talks with Canadian oil producers to ease oil curtailments as long as incremental production is shipped by rail, a move that could see crude-by-rail loadings jump higher.

Reporting by Nia Williams; Editing by Paul Simao

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