October 12, 2011 at 9:29 pm #2098
Canada crude-Heavy spreads shrink as Illinois start-up nears
20:18, Wednesday 12 October 2011
Reporting by Jeffrey Jones; editing by Rob Wilson
* WCS $9.90 under WTI
* Light synthetic $8.85-$9.20 under WTI
* Wood River, Billings refineries lift demand
CALGARY, Alberta, Oct 12, 2011 (Reuters) – The discount on Canadian heavy crude oil has narrowed with start-up drawing near for a $3.7 billion Illinois refinery upgrade that will boost demand for the grade, market sources said.
Western Canada Select heavy blend for November delivery was quoted at $9.90 a barrel under benchmark West Texas Intermediate, compared with $10.30 and $10.60 a barrel under WTI last week.
ConocoPhillips and Cenovus Energy Inc have said they expect the conversion project for their Wood River refinery to be complete in the fourth quarter, boosting demand for Canadian heavy oil by 130,000 barrels a day.
One trader said another likely factor behind stronger heavy prices is the return to normal output of Exxon Mobil Corp’s Billings, Montana, refinery. The 60,000 bpd plant had been running under capacity since July 1, when a pipeline feeding the plant ruptured.
Marketers have said a fire last week that damaged Consumers’ Co-operative Refineries Ltd 100,000 bpd refinery in Regina, Saskatchewan, appears to have had minimal impact on prices. A Co-op spokesman said this week the plant is producing gasoline at 50 percent its normal rate and diesel at 20 percent of capacity.
Meanwhile, the premium for light synthetic crude has changed little in recent days, remaining weaker than last month’s spreads with three major processing units having started up or scheduled to do so in the coming weeks.
November light synthetic was discussed at $8.85-$9.20 a barrel over WTI, compared with $8.40-$9.20 over on Friday.
Royal Dutch Shell said on Wednesday it restarted a bitumen upgrading unit at its Scotford, Alberta, facility that had been off line since Sept. 28.
Syncrude Canada’s coker 8-2 is expected to be back on line later this month following scheduled maintenance, and Husky Energy Inc is scheduled to ramp up output at its Lloydminster upgrader in the coming weeks.
Reuters link @ http://uk.finance.yahoo.com/news/Canada-crude-Heavy-spreads-targetukfocus-1945538751.html?x=0
October 12, 2011 at 9:30 pm #4890
Here is update on Canada crude heavy spreads and upgraders with upcoming increase demand like Woodriver startup, XOM Billings rasing rates, and fires lack impact Regina operations. (There will be some offsets to the increasing demand from higher Bitumen production from returning Syncrude upgrade coker 8-2, Llyodminster’s upgrader output ramp-up and Shell restarting Scotford upgrader).
Reuters Comments on Bitumen/heavy price differential fail point out that the WTI-Canada Bitumen differentials are abnormally weaker because of WTI Cushing glut price impacts compared to higher Brent and other US light crude prices.
You must be logged in to reply to this topic.