Canada crude - Synthetic grades weaken on strong supply

Reuters

* November synthetic trades at $10.50/bbl below WTI

* November WCS last at $31.90/bbl below WTI

CALGARY, Alberta, Oct 1 (Reuters) - Canadian light syntheticcrude prices weakened on Tuesday, the first day of the Octobertrading window, as a result of refinery outages and robustsupply.

Light synthetic crude from the oil sands for Novemberdelivery last traded at $10.50 per barrel below the West TexasIntermediate benchmark, according to Shorcan Energy brokers.

That compares with a settlement price of $7.00 per barrelbelow WTI on Monday, and was the lowest level since the firstquarter of 2012, according to Reuters data.

Traders in Calgary said healthy supply from Syncrude'snorthern Alberta oil sands project was weighing on prices.

"There's too much production and not enough pipelines," saidone Calgary crude trader, referring to the congested exportnetwork which can leave oil bottlenecked in Canada.

Suncor Energy Inc shut down a 32,000 barrel-per-dayhydrocracker unit at its 85,000 bpd refinery in Sarnia, Ontario,after a small fire broke out.

BP Plc's joint-venture 135,000 bpd Toledo refinerywas reported last week to be running at reduced rates.

Canadian crude prices historically weaken in the fourthquarter of each year as a result of reduced demand in winter.

Western Canada Select heavy blend for November delivery wassteady at $31.90 per barrel below WTI, unchanged from Monday'ssettlement price.

The differentials on Canadian heavy grades have also widenedsteadily since the summer.

BP's 405,000 bpd Whiting, Indiana, refinery has beenundergoing a revamp to enable it to run more heavy Canadiancrude, but problems with the construction of a coking unit meansthe work could continue past the end of 2013.

View Comments