Heavy Alberta Oil Falls Below $50 a Barrel, Lowest in 21 Months

Western Canada Select oil fell below $50 a barrel for the first time in more than 21 months as demand to ship crude on North American pipelines exceeded capacity.

Kinder Morgan Energy Pipeline LP apportioned demand to ship oil on its Platte pipeline system from Guernsey, Wyoming, to Wood River, Illinois, in July by 82 percent, the company said June 25. Enbridge Inc. (ENB) will shut its Line 5 crude-oil pipe to Sarnia, Ontario, from Superior, Wisconsin, from July 17-20 to conduct tests, two people with direct knowledge of the plans said June 8.

The price for Western Canada Select dropped $3.52 a barrel, or 6.6 percent, to $49.69 a barrel at 4:23 p.m. in New York, according to data compiled by Bloomberg. The grade last traded below $50 a barrel Sept. 17, 2010. The oil’s discount to West Texas Intermediate widened $1 to $28 a barrel.

Syncrude’s discount widened $1 to $5.50 below WTI. Syncrude is a synthetic oil upgraded from tarlike bitumen in Alberta into refinery-ready crude.

Bakken oil’s discount widened 50 cents to $14 below WTI.

On the U.S. Gulf Coast, Light Louisiana Sweet’s premium to WTI lost 30 cents a barrel to $12. Heavy Louisiana Sweet strengthened 40 cents to $14.30 over WTI.

Poseidon’s premium to WTI lost 5 cents to $7.75 a barrel. Southern Green Canyon’s premium narrowed 65 cents a barrel to $7.35. Mars Blend’s premium was steady at $8.80 a barrel.

Thunder Horse, a sour crude with lower sulfur content than Mars, Poseidon and Southern Green Canyon, added 35 cents to $11.50 a barrel over WTI.

To contact the reporter on this story: Aaron Clark in New York at aclark27@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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