Canada Heavy Oil Gains as Refinery Outages Seen Fixed Next MonthEdward Welsch
Canadian heavy crude gained for a second day on the spot market as refinery equipment failures that weakened demand may be partly resolved by next month.
The Federated Co-operative Ltd. refinery in Regina, Saskatchewan, is expected to complete repairs to equipment that processes heavy crude “within a few weeks,” Daryl Oshanek, a spokesman based in Saskatoon, said in an e-mail yesterday. The refinery, which normally processes as much as 60,000 barrels a day of heavy oil, shut down equipment after a Nov. 1 fire.
Western Canadian Select heavy crude for December delivery strengthened by $1 a barrel to a $40 discount to U.S. West Texas Intermediate oil, according to Calgary oil broker Net Energy Inc. November spot deliveries weakened 10 cents to a $43.10 discount.
WCS, the benchmark grade for production from the Canadian oil-sands, weakened over the past two weeks due to the Regina outage and after Citgo Petroleum Corp.’s Lemont, Illinois, refinery shut a crude unit after a fire on Oct. 23. The 170,500-barrel-a-day refinery is expected to restart the unit at reduced rates by the end of this week, the company said in an Oct. 28 statement.
WCS has weakened from a $31.90 discount at the end of September, and has traded at an average of $23.64 a barrel below West Texas Intermediate this year.
Syncrude Canadian light crude oil gained 15 cents to a $14.75 discount to WTI, Net Energy said.