Canadian heavy crude oil strengthened on the spot market in anticipation of the completion of a new pipeline to the U.S. Gulf Coast.
Construction of TransCanada Corp.’s 700,000-barrel-a-day Gulf Coast pipeline to Nederland, Texas, from the U.S. storage hub of Cushing, Oklahoma, has accelerated and will probably be completed by early January, according to a report today by energy information company Genscape Inc., which conducted aerial flyovers of the line on Sept. 29 and Oct. 6. TransCanada is preparing the line for commercial service late this year, Shawn Howard, a company spokesman based in Calgary, said in an e-mail.
Western Canadian Select heavy oil strengthened by $2.25 a barrel to a $29.25 discount to U.S. benchmark West Texas Intermediate crude, erasing the prior trading day’s decline, according to Calgary oil broker Net Energy Inc.
The Gulf Coast line would connect WCS crude to the Gulf Coast market, where refineries have been built to take heavy oil imports from Mexico and Venezuela that are of similar quality but more expensive than Canadian crudes. Maya heavy crude traded at $93.26 a barrel as of 4:14 p.m. New York time, compared with $71.69 a barrel for WCS, according to data compiled by Bloomberg.
Also on the Canadian spot market, Syncrude, a light oil processed from Canadian oil-sands bitumen, strengthened 25 cents to a $10.50 discount, Net Energy said.