Syncrude Rises to Nine-Month High as Midwest Plants Boost Rates
Syncrude oil from Alberta surged to the widest premium over West Texas Intermediate in nine months as U.S. Midwest refiners operated near full capacity for the second consecutive week.
Refiners in the Midwest region operated at 97.6 percent of capacity in the week ended Aug. 3, according to the Energy Department. That’s down from 98.9 percent the previous week. A year ago plants ran at 93.9 percent.
“The biggest contributor is the high utilization,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
Syncrude gained $3.15 to $6.40 over WTI at 2:26 p.m. in New York, according to data compiled by Bloomberg. That’s the largest premium for the grade since Nov. 2. Syncrude is a synthetic oil upgraded from tar-like bitumen in Alberta into refinery-ready crude.
Western Canada Select’s discount narrowed $2 to $13.75 a barrel below WTI, the narrowest margin since July 17. Bakken oil’s discount was steady at $2.50 a barrel below the U.S. benchmark.
In the U.S. Gulf Coast, most grades strengthened. Heavy Louisiana Sweet’s premium to the U.S. benchmark widened 25 cents to $17.25 a barrel. Light Louisiana Sweet’s decreased 45 cents to $17.35.
Poseidon’s premium added 5 cents to $12.30, while Southern Green Canyon’s decreased 25 cents to $11.25 a barrel over WTI. Mars Blend’s premium lost 10 cents to $12.90.
The premium for Thunder Horse, a sour crude with lower sulfur content than Mars, Poseidon and Southern Green Canyon, was steady at $16.90.
To contact the reporter on this story: Aaron Clark in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Dan Stets at email@example.com