Canadian heavy crude was unchanged in spot market trading as cold weather put downward pressure on both crude production rates and refinery demand.
Alberta heavy oil producers including Suncor Energy Inc., Canadian Oil Sands Ltd. and Baytex Energy Corp. reported declining production rates during December, when temperatures across the northern part of the province as temperatures dipped below minus 30 degrees Celsius (minus 22 Fahrenheit). In the U.S. refiners including Exxon Mobil Corp. and BP Plc that process Canadian crude reported equipment problems related to cold weather.
Western Canadian Select heavy crude for February delivery was unchanged at a $19.50 discount to U.S. benchmark West Texas Intermediate oil, according to Calgary oil broker Net Energy Inc. As cold weather in both Canada and the U.S. hampered energy production earlier this week, the discount had narrowed to $18.50 a barrel on Jan. 7, the smallest in five months, based on data compiled by Bloomberg.
Baytex, a mid-sized producer of mostly heavy oil based in Calgary, said cold weather curtailed its operations by as much as 5,000 barrels a day in December due to “severe winter weather, which impacted our ability to deliver crude oil from the field to sales delivery points.”
Larger Canadian oil companies Suncor and Canadian Oil Sands Ltd. also reported lower output last week. Production from Canadian Oil Sands’ Syncrude joint venture declined 10 percent to 291,300 barrels a day in December from the month earlier. Suncor reported a 4.6 percent oil-sands decline to 417,000 barrels a day from November.
Exxon’s 238,000-barrel-a-day Joliet, Illinois, plant was operating normally yesterday after extreme cold triggered failures at process units earlier this week, Tricia Simpson, a spokeswoman at the plant, said by e-mail.
BP’s 160,000-barrel-a-day Toledo refinery in Ohio restarted benzene strippers that shut down after equipment froze, according to a regulatory filing yesterday.
Also in the Canadian spot market, Cold Lake heavy crude lost 5 cents a barrel against WTI to a $1.10 discount, Net Energy said. The Syncrude light oil grade gained 45 cents to a $2.25 premium.
Light Louisiana Sweet oil gained on the U.S. Gulf Coast, climbing 40 cents to a premium of $7.30 a barrel to WTI. Heavy Louisiana Sweet’s premium to WTI rose 35 cents a barrel to $9.60. Mars Blend and Poseidon both weakened by 70 cents a barrel to premiums of $4.05 and $3.25 a barrel, respectively.