Refinery outages in the US are rippling through the global export markets for oil and forcing producers in Canada to find new buyers to process their crude.
(Bloomberg) — Refinery outages in the US are rippling through the global export markets for oil and forcing producers in Canada to find new buyers to process their crude.
Canadian oil sands producers have been pumping at record levels to fill supply needs left after western economies put sanctions on Russia. Canada typically sends crude to refiners in the US, where two plants were forced to halt production after fires.
The winner in the shake up appears to be refiners in Asia, who are seeing shipments from Canada surge to the highest in more than a year.
At least 7 million barrels of heavy-sour crude produced in Canada’s oil sands have been sold to Asian buyers for February loading, according to people familiar with the matter. That’s the most since January 2022, Vortexa data shows.
The two shuttered US refiners together consume an average of 3 million barrels of Canadian oil per month.
Daily production in Alberta’s oil sands is surging, helping to send total output to a record 3.96 million barrels a day in November, government data shows. The Canadian government has said production will keep rising this year in response to the Russian invasion of Ukraine.
- Unipec, the trading arm of China’s biggest state-owned oil refiner Sinopec, will take 3 million barrels, while PetroChina Co. and Indian refiner Reliance Industries Ltd. will each receive 2 million, said the people, who asked not to be named discussing confidential matters.
- Another 1 million barrels was sold to Repsol SA for Europe, the people said.
- Cold Lake crude from Alberta was being offered in the export market at about $22 a barrel below the ICE Brent benchmark for loading on the US Gulf Coast, traders said. The same grade for domestic consumption traded at a $14.85 discount to WTI on the Gulf Coast, 40 cents stronger than Tuesday, data show.
- BP Plc’s BP-Husky Toledo refinery in Ohio isn’t expected to return to service before late in the second quarter, while Suncor Energy’s Commerce City facility in Colorado is shut until later this quarter.
(Updates with production in last paragraph.)
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