CALGARY, Alberta, Oct 6 (Reuters) - Canadian crude oil price spreads are tightening with the restart of pipelines in the U.S. Midwest and as companies conduct maintenance at oil sands and heavy oil upgraders, market sources said Wednesday.
The discounts for November are a major shift from last month, when the outages of two Enbridge Inc pipelines led to a glut of supplies in Western Canada, crushing prices.
Western Canada Select heavy blend was discussed on Wednesday at around $14.50 to $15 a barrel under benchmark West Texas Intermediate light crude, a dollar or two narrower than quotes early this week.
The October WCS differential had ballooned to more than $30 a barrel during the outages of Line 6A and 6B in September.
Synthetic crude for November was discussed at 65 cents to 90 cents a barrel under WTI, 20 cents to 45 cents narrower than Monday.
November WTI rose 41 cents to settle at $83.23 a barrel, a five-month high, as a larger than expected drawdown in U.S. gasoline stockpiles and a sinking U.S. dollar prompted investors to bid up energy futures.
Enbridge's Line 6B, which runs to Sarnia, Ontario, from Griffith, Indiana, restarted last week after being shut down for more than two months following a rupture near Marshall, Michigan. It is expected to operate at a restricted rate of about 245,000 barrels a day.
The 675,000 bpd Line 6A was shut for eight days in September following a leak near Romeoville, Illinois.
'You're starting to get back to more normalized conditions, and a lot of that backlog from the line outages should be cleared out by (November),' analyst Martin King of FirstEnergy Capital Corp said.
Lifting synthetic prices, planned and unplanned maintenance at Syncrude Canada Ltd is expected to reduce production at the major oil sands plant to an average of about 285,000 bpd for the remainder of the year, its largest shareholder said late last month.
That represents a drop of about 19 percent from the operation's capacity. A coker outage at Syncrude began on Sept. 9.
Suncor Energy Inc is in the midst of six weeks of maintenance that is expected to reduce its output by 35,000 bpd, or 10 percent.
Meanwhile, Husky Energy Inc took its 82,000 bpd Lloydminster heavy oil upgrader down for planned upkeep in late August. That work is expected to last two months.
In refinery news, Exxon Mobil Corp said on Wednesday a diesel hydrotreater at its 238,600 bpd refinery in Joliet, Illinois, was shut after a compressor fire on Tuesday evening. There is no estimate on when the unit will be repaired.
(Reporting by Jeffrey Jones and Bruce Nichols; editing by Rob Wilson) Keywords: MARKETS CANCRUDE/ (jeff.jones@thomsonreuters.com; +1 403 531 1624; Reuters Messaging: jeff.jones.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The discounts for November are a major shift from last month, when the outages of two Enbridge Inc pipelines led to a glut of supplies in Western Canada, crushing prices.
Western Canada Select heavy blend was discussed on Wednesday at around $14.50 to $15 a barrel under benchmark West Texas Intermediate light crude, a dollar or two narrower than quotes early this week.
The October WCS differential had ballooned to more than $30 a barrel during the outages of Line 6A and 6B in September.
Synthetic crude for November was discussed at 65 cents to 90 cents a barrel under WTI, 20 cents to 45 cents narrower than Monday.
November WTI rose 41 cents to settle at $83.23 a barrel, a five-month high, as a larger than expected drawdown in U.S. gasoline stockpiles and a sinking U.S. dollar prompted investors to bid up energy futures.
Enbridge's Line 6B, which runs to Sarnia, Ontario, from Griffith, Indiana, restarted last week after being shut down for more than two months following a rupture near Marshall, Michigan. It is expected to operate at a restricted rate of about 245,000 barrels a day.
The 675,000 bpd Line 6A was shut for eight days in September following a leak near Romeoville, Illinois.
'You're starting to get back to more normalized conditions, and a lot of that backlog from the line outages should be cleared out by (November),' analyst Martin King of FirstEnergy Capital Corp said.
Lifting synthetic prices, planned and unplanned maintenance at Syncrude Canada Ltd is expected to reduce production at the major oil sands plant to an average of about 285,000 bpd for the remainder of the year, its largest shareholder said late last month.
That represents a drop of about 19 percent from the operation's capacity. A coker outage at Syncrude began on Sept. 9.
Suncor Energy Inc is in the midst of six weeks of maintenance that is expected to reduce its output by 35,000 bpd, or 10 percent.
Meanwhile, Husky Energy Inc took its 82,000 bpd Lloydminster heavy oil upgrader down for planned upkeep in late August. That work is expected to last two months.
In refinery news, Exxon Mobil Corp said on Wednesday a diesel hydrotreater at its 238,600 bpd refinery in Joliet, Illinois, was shut after a compressor fire on Tuesday evening. There is no estimate on when the unit will be repaired.
(Reporting by Jeffrey Jones and Bruce Nichols; editing by Rob Wilson) Keywords: MARKETS CANCRUDE/ (jeff.jones@thomsonreuters.com; +1 403 531 1624; Reuters Messaging: jeff.jones.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.