Canadian light crudes strengthened on the spot market before refinery maintenance closings that will reduce supplies.
Two plants in Alberta will be shut for work starting next month. Royal Dutch Shell Plc (RDSA)’s 97,870 barrel-a-day Scotford refinery will close for most of September, a person familiar with the matter told Bloomberg on July 30. Husky Energy Inc. (HSE)’s 82,000 barrel-a-day Lloydminster upgrader will shut for 45 days starting in early September, executives said on an earnings call last month.
Syncrude, a light oil produced from oil-sands bitumen, strengthened for September delivery by $1 to a $3.50 premium to U.S. benchmark West Texas Intermediate, according to Calgary oil broker Net Energy Inc. It was the highest level for the grade since July 19, according to data compiled by Bloomberg.
Syncrude supplies had been limited in past months by maintenance at other Alberta upgraders, plants that convert heavy bitumen into higher-quality light oil.
Canadian Natural Resources Ltd. (CNQ) said today that May maintenance at its Horizon upgrader caused second-quarter production to decline 38 percent from the first quarter, to 67,954 barrels a day. Production at the Syncrude upgrader declined 30 percent in July to 183,000 barrels a day from a year earlier because of maintenance on a coker, according to Canadian Oil Sands Ltd. (COS), the company’s largest owner.
Canadian conventional light, sweet oil for September delivery strengthened by 35 cents a barrel to a $6.30-a-barrel discount to WTI, Net Energy said. Western Canadian Select heavy oil weakened by 10 cents a barrel to $22.90 below WTI, according to Net Energy.
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