Canadian oil-sands producers are finding U.S. refiners are doing just fine without as much crude from their northern neighbor.
(Bloomberg) -- Canadian oil-sands producers who are restoring production after wildfires are finding U.S. refiners are doing just fine without as much crude from their northern neighbor.
The U.S. imported 2.6 million barrels a day from Canada last week, the smallest amount since May 13, preliminary data from the Energy Information Administration show. The decline came after producers including Suncor Energy Inc. and Syncrude Canada Ltd. brought back more than a million barrels a day that was shut in May amid the worst wildfire in Alberta’s history.
U.S. refiners made commitments to import crude by sea from alternative suppliers when the northern Alberta wildfire was out of control, and the duration of disruption to supplies was unclear, John Auers, executive vice president at Turner Mason & Co. in Dallas, said by phone Thursday. Those imports are arriving now, he said.
“As the supply comes back on, that will displace some of the imports brought in to replace that lost supply,” he said.
Imports from Mexico, which compete with Canada’s heavy crude, rose to 803,000 barrels a day last week, the highest since April 15, EIA data show. Shipments from Saudi Arabia also increased.
A wildfire that broke out at the beginning of May prompted the shutdown of as much as 1.4 million barrels a day of oil-sands production, about 40 percent of Canada’s supply. Since then, restarts have restored most of the lost output. Rising output combined with reduced U.S. demand has weakened Canadian heavy-crude prices, with Western Canadian Select trading at its biggest discount to U.S. futures since April.
Western Canadian Select’s discount to West Texas Intermediate futures grew 10 cents to $14.25 a barrel Thursday, the biggest discount since April 18, data compiled by Bloomberg show. Light synthetic crude, produced from oil sands upgraders, has also weakened, trading at a 30 cent a barrel discount to WTI, the biggest discount since April 22.
To contact the reporter on this story: Robert Tuttle in Calgary at firstname.lastname@example.org. To contact the editors responsible for this story: Margot Habiby at email@example.com, Carlos Caminada, Alpana Sarma
©2016 Bloomberg L.P.
Most Popular Articles