November 27, 2013 / 10:59 PM / 4 years ago

Canada crude - Heavy grades fall in thin trade

CALGARY, Alberta, Nov 27 (Reuters) - Canadian heavy crude differentials widened in thin trade on Wednesday, with markets choppy in the run-up to the Thanksgiving holiday in the United States.

The Canadian crude market is outside the roughly three-week long trading “window” - from the first of the month until the day before pipeline nominations are due - when the bulk of trading takes place.

Western Canada Select heavy blend for December delivery last traded at $34.00 per barrel below the West Texas Intermediate benchmark, according to Shorcan Energy brokers.

That compares with a settlement price of $32.00 per barrel below WTI on Tuesday.

Traders in Calgary said the wider discount on Wednesday was down to thin liquidity and the fact that some market players saw the recent rally in WCS prices as being overdone.

The discount on WCS has narrowed sharply in recent weeks from $41.50 per barrel below WTI, the widest differential in 10 months, which was hit on Nov. 5.

News that BP Plc began the lengthy start-up process on a new 102,000 barrel per day coker at its Whiting, Indiana, refinery, in mid-November helped WCS prices rally.

The coker is a crucial step in a $4-billion overhaul of Whiting that will allow it to run mostly heavy Canadian crude.

“News they have started up the new coker is the main catalyst behind the narrowing of the WCS differential to WTI,” said David Bouckhout, senior commodities analyst at TD Securities.

Bouckhout said the Co-op refinery in Regina, Saskatchewan, returning to full capacity after a fire earlier this month had also helped support crude prices.

There were no trades in light synthetic crude from the oil sands for December delivery, according to Shorcan Energy brokers. On Tuesday synthetic crude settled at $13.00 per barrel below the WTI benchmark.

Shell Canada reported planned maintenance at its 100,000 bpd Scotford refinery near Edmonton, Alberta. The refinery runs light synthetic crude that has been mined and upgraded at Shell’s Athabasca oil sands project.

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