Canadian oil collapses to three-year-low
Heavy Canadian crude fell to a three-year low against benchmark prices Tuesday as bottlenecks on pipelines and rail networks crimped exports.
Canadian crude’s discount to West Texas Intermediate futures has widened more than US$10 since August as pipeline companies including Enbridge Inc. rationed space amid high Western Canadian inventories. Rail cars struggled to catch up on deliveries after line disruptions over the past two months.
“You are in a serious pain point right now,” Mike Walls, a Genscape Inc. analyst, said by phone from Boulder, Colorado. “It’s the perfect storm of too much supply and not enough capacity.”
Western Canadian Select’s discount to WTI steepened US$3.50 to US$25.25 a barrel, the weakest price since February 2014, according to data compiled by Bloomberg at 9:52 a.m. Calgary time. It was US$10.05 below WTI four months ago. The outright price of the crude slid US$4.07 to US$32.17 a barrel, the lowest level since June. Edmonton Mixed Sweet crude’s discount to WTI grew US$1 to US$7 a barrel, the widest since January 2015, and the price fell US$1.57 to US$50.42 a barrel.
TransCanada Corp.’s Keystone pipeline to the U.S. shut for almost two weeks last month after a spill in South Dakota, contributing to rising oil inventories in Western Canada. While service on the line has resumed, it’s required to run at a reduced pressure, meaning less oil can pass through.
Enbridge said Monday it would ration space on some of its pipelines by another 5 per cent in December. The announcement came after the company required shippers on light oil feeder pipelines around Edmonton, Alberta, to restrict deliveries because of “high inventories.” Enbridge’s main line ships heavy and light crude from Edmonton to Superior, Wisconsin.
Canadian oil collapses to three-year-low
Heavy Canadian crude fell to a three-year low against benchmark prices Tuesday as bottlenecks on pipelines and rail networks crimped exports.
Canadian crude’s discount to West Texas Intermediate futures has widened more than US$10 since August as pipeline companies including Enbridge Inc. rationed space amid high Western Canadian inventories. Rail cars struggled to catch up on deliveries after line disruptions over the past two months.
“You are in a serious pain point right now,” Mike Walls, a Genscape Inc. analyst, said by phone from Boulder, Colorado. “It’s the perfect storm of too much supply and not enough capacity.”
Western Canadian Select’s discount to WTI steepened US$3.50 to US$25.25 a barrel, the weakest price since February 2014, according to data compiled by Bloomberg at 9:52 a.m. Calgary time. It was US$10.05 below WTI four months ago. The outright price of the crude slid US$4.07 to US$32.17 a barrel, the lowest level since June. Edmonton Mixed Sweet crude’s discount to WTI grew US$1 to US$7 a barrel, the widest since January 2015, and the price fell US$1.57 to US$50.42 a barrel.
TransCanada Corp.’s Keystone pipeline to the U.S. shut for almost two weeks last month after a spill in South Dakota, contributing to rising oil inventories in Western Canada. While service on the line has resumed, it’s required to run at a reduced pressure, meaning less oil can pass through.
Enbridge said Monday it would ration space on some of its pipelines by another 5 per cent in December. The announcement came after the company required shippers on light oil feeder pipelines around Edmonton, Alberta, to restrict deliveries because of “high inventories.” Enbridge’s main line ships heavy and light crude from Edmonton to Superior, Wisconsin.
Canadian oil collapses to three-year-low
