Bakken Oil Surges on Tesoro, Irving Refinery Rail Shipments

Bakken oil’s premium to West Texas Intermediate crude surged to the widest in almost a year as refineries on the East and West coasts began receiving or were expected to get shipments this month.

Tesoro Corp. (TSO) received the first unit-train of Bakken crude Sept. 4 at a new offloading terminal that will allow the company’s Anacortes refinery in Washington state to receive as much as 50,000 barrels a day by rail. Irving Oil Ltd. expects a train terminal for offloading 70,000 barrels a day of Bakken and Western Canada grades near its Saint John refinery in New Brunswick to be fully operational this month, a person with knowledge of the situation said today.

Bakken strengthened $4 to a premium of $6 above the U.S. benchmark at 12:18 p.m. in New York, according to data compiled by Bloomberg. That’s the largest premium for the grade since Oct. 4.

Syncrude’s premium widened $1.25 to $12 a barrel over WTI, the largest margin since Oct. 25, as upgrader maintenance this quarter is expected to curtail supply. Suncor Energy Inc. (SU) plans to start work this month on its No. 2 upgrader near Fort McMurray. Canadian Natural Resources Ltd. (CNQ) is performing work at its Alberta plant in the third quarter.

Western Canada Select’s discount narrowed $2.25 to $9.25 a barrel.

On the U.S. Gulf Coast, grades were unchanged or strengthened. Light Louisiana Sweet’s premium to WTI was steady at $16.25 a barrel. Heavy Louisiana Sweet was unchanged at $16.50 over WTI.

Poseidon’s premium was unchanged at $12.70. Mars Blend’s premium was steady at $12.60 a barrel over WTI. Southern Green Canyon’s widened by 10 cents to $10.75.

Thunder Horse, a sour crude with lower sulfur content than Mars, Poseidon and Southern Green Canyon, added 10 cents to a premium of $15.25.

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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