November 16, 2011 / 1:38 AM / 7 years ago

UPDATE 2-Canada crude-Synthetic spread jumps on Syncrude woes

(Adds Canadian Oil Sands statement)

CALGARY, Alberta, Nov 15 (Reuters) - Prices for Canadian synthetic crude oil jumped late on Tuesday after oil sands operator Syncrude Canada Ltd cut its production forecast for December, market sources said.

Synthetic crude had been trading at about $4 a barrel above the West Texas Intermediate benchmark earlier on Tuesday. It jumped to $7.15 a barrel over WTI after Syncrude advised the market of the production cut, sources said.

Sources said Syncrude lowered its December synthetic crude production forecast by 2.1 million barrels, or nearly 67,750 barrels per day on Tuesday afternoon.

“That’s a big one,” said one source.

Syncrude had already lowered its November production forecast by 40,000 bpd as it worked on a hydrogen plant at its upgrading operations. That work had been expected to be wrapped up in early December.

However, Canadian Oil Sands Ltd COS.TO, which has the largest stake in the Syncrude joint venture, having 37 percent interest, said in a statement late Tuesday that it now expects the maintenance to be completed by the end of the year.

The company, which lowered its 2011 total barrels production forecast for Syncrude, now sees production of 105-107 million barrels for the full year.

It said that it does not see any material impact to operating costs or capital expenditures estimates for the year. (Reporting by Scott Haggett and Kavyanjali Kaushik in Bangalore; editing by Bob Burgdorfer)

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