Canadian crudes weakened on the spot market after the largest oil-sands producer, Suncor Energy Inc., said output reached a record last month, increasing supplies.
Suncor’s oil-sands production reached 390,000 barrels a day in July, the Calgary company said in a release today. Output rebounded 33 percent from June rates, which were reduced as Alberta pipelines were shut because of record flooding.
Western Canadian Select oil for September delivery weakened by $1.50 a barrel to a $23.75 discount to U.S. benchmark West Texas Intermediate oil, according to Calgary oil broker Net Energy Inc. Syncrude light oil, produced from oil-sands bitumen, lost 40 cents to trade at a $2 premium, the broker said.
“Our oil sands facilities have been producing at record rates the past few weeks, and our refineries are operating at near capacity,” Suncor Chief Executive Steve Williams said during the company’s conference call last week. “Obviously, this implies strong production through the second half of the year and that’s exactly what we’re expecting.”
Production at another large oil-sands producer, Syncrude Canada Ltd., declined 17 percent to 183,000 barrels a day in July because of coker maintenance that’s expected to be complete in early August, according to a statement by the project’s largest owner, Canadian Oil Sands Ltd. Siren Fisekci, a spokeswoman for Canadian Oil Sands, declined to comment on the status of the maintenance in an e-mailed response.
Lower production from Canada contributed to the rise in U.S. benchmark WTI oil last month, which exceeded international marker Brent for the first time in almost three years. WTI declined 60 cents against Brent to a $2.88 discount, based on settlement prices.
WTI prices will fall to a $6-a-barrel discount to Brent by the end of 2013 “as crude oil production in Alberta, Canada, recovers following the heavy June flooding and as Midcontinent production continues to grow,” the U.S. Energy Information Administration said yesterday in a report.