A flurry of outages across western Canada’s oil patch have disrupted petroleum flows to the US and global markets.
(Bloomberg) — A flurry of outages across western Canada’s oil patch have disrupted petroleum flows to the US and global markets.
Two of Canada’s largest oil-sands upgrading facilities — Syncrude Canada and Canadian Natural Resources Ltd.’s Horizon — have faced disruptions this month, prompting supply cuts to customers. The reduced supply has led Enbridge Inc. to seek more crude for its massive Mainline system, which delivers to numerous refiners.
One of the biggest crude pipelines from Canada to the US — TC Energy Corp.’s Keystone — has been hit by power outages due to ice accumulation. Flows on the conduit have rebounded from lows earlier this week. A Pembina Pipeline Corp. line that transports natural gas liquids has been isolated after a spill in Alberta, and Enbridge’s Express Pipeline from the province to Wyoming experienced problems with third-party utilities that cut rates.
Canada is a major supplier of crude to US refiners, and supply disruptions have already increased prices for the low-sulfur grades the Canadian upgraders produce. A prolonged outage may tighten inventories across North America just as stockpiles started to recover from near-historical lows. Still, the start of seasonal refinery-maintenance may reduce demand, which would help prevent major price shocks.
Heavy Canadian crude’s discount to US benchmark oil has narrowed this year because of increased buying from China. Still, the spread widened slightly on Friday as Keystone pipe rates were cut. In Alberta, Western Canadian Select’s discount to West Texas Intermediate widened 25 cents to $23.75 a barrel on Friday, data compiled by Bloomberg show.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.
