Suncor Energy Inc. (SU)’s output was curtailed last month when Enbridge Inc. shut down its regional oil-sands pipeline system because of the flooding. Production had been reduced by about 3 million barrels during the pipeline interruption, the company said.
Western Canadian Select, a heavy bitumen blend, weakened 25 cents to a $16.25 discount to U.S. benchmark West Texas Intermediate oil, according to Calgary oil broker Net Energy Inc. Syncrude, a light oil from oil-sands bitumen, was unchanged at a $3-a-barrel premium to WTI as of 1:10 p.m. New York time, after losing as much as 25 cents a barrel in earlier trading, Net Energy said.
Suncor “has returned to full production at its oil sands operations,” the company said in a release today. “Since the restart of the Enbridge (ENB) regional oil sands pipeline system earlier this month, Suncor has been ramping up its oil sands production as pipeline and storage capacity would allow.”
Enbridge shut down its oil-sands systems on June 22 after heavy rain caused the ground to shift under Line 37, which leaked about 1,300 barrels of oil from Nexen Inc.’s Long Lake project. The northern portion of the Athabasca pipeline from Fort McMurray, where Suncor’s oil-sands operations are located, was returned to full pressure as of July 11.
The flooding in southern Alberta caused by the heavy rains was the worst in the province’s history, the provincial government said.
Suncor said it still expects its annual oil-sands output to be within the range of 350,000 to 380,000 barrels a day, even after the pipeline interruption. It produced 389,000 barrels of oil sands a day during the first quarter.
“The Midwest is short crude following Canada flooding and refinery restarts,” Adam Longson, an analyst with Morgan Stanley in New York, said in a note to clients yesterday. “Canada is slowly returning and the pace of draws should slow as early as next week,” he said.
U.S. refinery operating rates increased to 92.4 percent in the week ended July 5, the highest level since August, according to Energy Information Administration data. Refineries boosted rates as they returned from maintenance and as demand for gasoline rose in the summer driving season.
U.S. crude supplies probably fell to the lowest level in more than five months as vacationers stoked demand for gasoline, a Bloomberg survey showed. Stockpiles decreased by 2 million barrels, or 0.5 percent, to 371.9 million barrels in the week ended July 12, according to the median of nine analyst estimates before a report tomorrow by the EIA.
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