Canadian Oil Price Barely Moves as Inventories Blunt Fire’s Blowby
U.S. Canadian oil imports rise above 3 million barrels a day
Wildfires were ‘probably just a blip’ for U.S. refiners
Canadian crude prices barely strengthened after this month’s wildfires cut more than 40 percent of oil sands production as local inventories helped make up for lost output.
Heavy Western Canadian Select, which traded $13.35 a barrel below West Texas Intermediate futures on April 29, advanced to a discount of $11.35 before falling back to $12 Wednesday, data compiled by Bloomberg show. The fire in northern Alberta, which started May 1 and prompted the evacuation of thousands, took as much as 1.2 million barrels a day offline.
“In the end, it was probably just a blip,” John Auers, executive vice president at Turner Mason & Co. in Dallas, said of the fires on Tuesday in a phone interview. “It didn’t impact refineries in any big way.”
To make up for the lost production, 3.3 million barrels of crude was withdrawn from storage tanks in Edmonton, Hardisty and Kerrobert in the three weeks ended last week, drawing inventories down to 22.3 million, Carl Evans, oil analyst at Genscape Inc., said in an instant message.
Oil-sands companies also had some production offline when this year’s wildfire started. Suncor and Syncrude conducted scheduled maintenance on upgraders, which turn oil sands bitumen into light synthetic crude, according to Genscape.
The fires had muted impact on exports as well. Canadian crude shipments to the U.S. rose 501,000 barrels a day to 3.09 million last week, the highest since the fire began, U.S. Energy Information Administration data show.
Increased shipments from the waters off Canada’s east coast accounted for the increase, according to Gurpal Dosanjh, oil analyst at Bloomberg Intelligence in New York. Imports into the U.S. Midwest, the bulk of which come from Canada, fell 1.2 percent to 2.1 million barrels a day, the smallest decline in four weeks.