March 11, 2011 at 4:39 pm #2349
Canada crude-Synthetic premium rebounds with US spreads
* Synthetic quoted at around $15/bbl over WTI
* WCS around $20 under WTI
* Brent premium over WTI climbs again
* Japan earthquake pressures benchmark oil prices
CALGARY, Alberta, March 11, 2011 (Reuters) – Canadian synthetic crude price spreads widened on Friday in line with bigger premiums for U.S. crudes with similar characteristics and a thicker differential between U.S. and world benchmarks, industry sources said.
Synthetic oil for April delivery was quoted at around $15 a barrel above West Texas Intermediate, up from about $10 a few days ago and close to levels at the start of this month.
Synthetic, derived from Alberta’s oil sands, has jumped above WTI this year due to the outage of Canadian Natural Resources Ltd’s Horizon oil sands plant and a halving of output at Husky Energy Inc’s 82,000 bpd heavy oil upgrader. Canadian Natural expects its fire-damaged 110,000 bpd operation to start pumping half its capacity before the end of June and return to full volumes in the third quarter.
Husky has said it expects production at its plant at Lloydminster on the Alberta-Saskatchewan border to return to normal levels some time this month after a small fire restricted output in February.
Synthetic has also climbed along with U.S. crude such as Light Louisiana Sweet LLS-, whose premium over WTI gained 80 cents on Friday to $15.50 a barrel.
U.S. benchmark prices were down $1.68 at $101.02 a barrel on Friday after a massive earthquake shook Japan, shutting refineries and other industrial facilities in the world’s third-largest oil consumer.
Brent’s premium to WTI rose 49 cents to $13.08 a barrel, after falling below $8 this week and reaching a record above $17 last week. Meanwhile, Western Canada Select heavy blend was quoted around $20 a barrel under WTI, close to Monday’s level.
Heavy prices have been pressured in recent months by tight capacity on Enbridge Inc’s export pipeline system to the U.S. Midwest as the company has increased testing and maintenance following two ruptures last summer.
Enbridge said it had restarted its 290,000 bpd Line 6B after shutting it on Monday for repairs to part of the line in Michigan, the state in which the line ruptured in late July.
(Reporting by Jeffrey Jones; editing by Rob Wilson)
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