Canada Heavy Oil Weakest in Three Weeks on Lemont Refinery Fire
Canadian heavy crude weakened to its widest discount to the U.S. benchmark in almost three weeks after an Illinois refinery that processes the grade curtailed operations because of a fire.
Citgo Petroleum Corp.’s Lemont, Illinois, refinery was running at reduced rates after the crude unit fire late yesterday, Fernando Garay, a company spokesman in Houston, said in an e-mail. Crude oil pipelines from Alberta to the U.S. were also full, according to people familiar with the matter.
Western Canadian Select slid $1.50 a barrel to a $33.50 discount against West Texas Intermediate, said Calgary oil broker Net Energy Inc. It was the widest differential for the grade since Oct. 4, according to data compiled by Bloomberg.
Fire broke out at about 7:40 p.m. local time yesterday at the Lemont refinery, Citgo said in an e-mailed statement. The plant normally processes 170,000 barrels of crude a day. Some units were operating, although production was “significantly reduced,” Garay said.
The largest oil import pipeline system to the U.S., Enbridge Inc. (ENB)’s Mainline, apportioned five lines supplying the U.S. Midwest and Chicago markets and eastern Canada, according to two people familiar with the matter. Apportionment occurs when shippers ask to transport more oil than a line can hold and typically indicates high supplies.
Canadian Syncrude, a light oil processed from heavy crude, was unchanged at a $9.50 discount to WTI for December delivery, Net Energy said.
To contact the reporter on this story: Edward Welsch in Calgary at firstname.lastname@example.org
To contact the editor responsible for this story: Dan Stets at email@example.com