Canada Heavy Oil Gains as Citgo Restarts Part of UnitEdward Welsch
Canadian heavy crude gained strength for a second day on the spot market as a Chicago-area refinery restarted part of a crude unit damaged by fire.
Citgo Petroleum Corp.’s Lemont, Illinois, refinery restarted a section of the crude unit on Nov. 11, the company said in a statement late yesterday. Another damaged section of the unit needs to be repaired and no timetable for its restart has been set, the Houston-based company said.
Western Canadian Select, a blend of heavy oil-sands bitumen, gained $1 a barrel to a $34.75 discount to U.S. benchmark West Texas Intermediate crude, according to Calgary oil broker Net Energy Inc. It was the strongest price for the grade in two weeks, according to data compiled by Bloomberg.
WCS prices dropped to a $42 discount Nov. 5 from a $30 discount on Oct. 22, the day before the fire at the 170,500-barrel-a-day Lemont plant. The refinery takes as much as 10 percent of Canada’s heavy sour crude exports, according to an estimate by Stephen Schork, president of the Schork Group Inc. energy research firm in Villanova, Pennsylvania.
Also contributing to WCS’s slide was a Nov. 1 fire in a heavy crude unit at the Federated Co-operative Ltd. refinery in Regina, Saskatchewan. The refinery normally processes as much as 60,000 barrels a day of Canadian heavy crude oil. Repairs will be completed “within a few weeks,” Daryl Oshanek, a spokesman based in Saskatoon, said in an e-mail last week.
Canada will produce 1.48 million barrels a day of heavy crude this year, according to a forecast by the country’s National Energy Board.
Syncrude, a light oil produced by oil-sands upgraders, strengthened by 15 cents to a $13.35 discount to WTI, Net Energy said.