Canada crude - Prices strengthen after gas line rupture


CALGARY, Alberta, Oct 17 (Reuters) - Canadian cash crudeprices strengthened on Thursday after a rupture on TransCanadaCorp's natural gas pipeline in northern Alberta forcedoil sands producers to pare output.

TransCanada has not yet said when its damaged North CentralCorridor pipeline, which as the capacity to carry as much as 1.6billion cubic feet of gas per day, will return to service.

But the closure forced some of Canada's largest producers,including Imperial Oil Ltd, Suncor Energy Inc and Syncrude Canada Ltd, to cut back operations as they wait forcritical gas supplies to return.

Western Canada Select heavy blend for November delivery waslast trading at $29.50 per barrel below the West TexasIntermediate benchmark, according to Shorcan Energy brokers.

The differential had earlier tightened sharply to $26.50 perbarrel under WTI, the narrowest level since mid-September, asnew of the pipeline outage reached the market.

That compares with a settlement price of $30.00 per barrelbelow the benchmark on Wednesday.

Traders in Calgary said assumptions that the gas outagewould not affect November production helped pare gains.

"When will it be fixed is the question," one crude tradersaid. "This is quite bad, but it is an October issue."

Light synthetic crude from the oil sands for Novemberdelivery strengthened to $9.50 per barrel below WTI, comparedwith Wednesday's settlement price $10.60 under the benchmark.

View Comments (0)