August 28, 2017 / 9:25 PM / a year ago

Heavy grades slip as traders eye Gulf Coast shutdowns

The downtown skyline reflected in the flood water at Buffalo Bayou Park in Houston. REUTERS/Nick Oxford

CALGARY, Alberta (Reuters) - Canadian heavy crude differentials widened on Monday in quiet trade as some market players anticipated refinery shutdowns in the storm-hit U.S. Gulf Coast region backing up crude supplies in Canada.

Torrential rain in the aftermath of Hurricane Harvey has caused catastrophic flooding along the Gulf Coast, prompting refiners in the region to shut operations as a precaution.

In total, 2.45 million barrels per day, or 13 percent, of U.S. refining capacity is offline.

Western Canada Select heavy blend crude for October delivery last traded at $10.35 per barrel below the West Texas Intermediate benchmark, according to Shorcan Energy brokers, widening from $9.90 per barrel under the benchmark on Friday.

One Calgary-based trader said there could be reduced demand for Canadian heavy from Gulf Coast refiners for the next few months, although another said putting barrels in storage may help mitigate the impact on prices.

Light synthetic crude from the oil sands for October delivery last traded at 85 cents per barrel over WTI, having settled at 80 cents a barrel over the benchmark on Monday.

Editing by Dan Grebler

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