Canada Crudes Weaken as Oil Pipeline Said to Apportion Shipments

Canadian crudes weakened on the spot market as Enbridge Inc. was said to have issued a mid-month apportionment notice for shipments on one of its crude oil export pipelines.

Enbridge told shippers apportionment on its Line 4 crude oil pipeline increased to 17 percent from the 10 percent level issued last month, according to two people familiar with the matter. Line 4 can ship 796,000 barrels of oil a day from Edmonton, Alberta, to Superior, Wisconsin. Apportionment occurs when there’s more demand to move oil through a pipeline than there is space, creating a logistical bottleneck.

Western Canadian Select heavy crude for December delivery weakened by $1.50 a barrel to a $35.50 discount to U.S. benchmark West Texas Intermediate oil, according to Calgary oil broker Net Energy Inc.

January and February WCS shipments also weakened. January deliveries fell $1.95 a barrel against WTI to a $32.75 a discount, and February declined by $1.15 a barrel to a $29.15 discount, the broker said.

A spokesman for the Calgary-based pipeline company didn’t immediately respond to an e-mail asking for confirmation of the mid-month apportionment.

At Superior, Line 4 connects with pipelines that can carry crude to refineries in the U.S. and eastern Canada, according to a schematic on Enbridge (ENB)’s website.

Canadian Syncrude, a light oil produced by oil-sands upgraders, also weakened, declining 75 cents against WTI to a discount of $8.75, Net Energy said.

To contact the reporter on this story: Edward Welsch in Calgary at ewelsch1@bloomberg.net

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

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.