Canada crude-Lower production lifts synthetic premium

Thu Dec 6, 2012 3:44pm EST

Related Topics

* Light synthetic quoted at $1.75/bbl over WTI

* WCS quoted at $32/bbl under WTI

* Syncrude, Suncor report lower November production

* Pipeline to U.S. Gulf Coast shut for maintenance

CALGARY, Alberta, Dec 6 (Reuters) - Canadian light synthetic oil prices rose on Thursday on increasing evidence of tight supplies as the two largest oil sands operations reported drops in production during November, market sources said.

Heavy crude prices weakened, meanwhile, after word of a maintenance outage on a pipeline to the U.S. Gulf Coast and due to operational problems at a Texas refinery that runs Canadian heavy.

Light synthetic for January delivery, which has gained strength steadily all week, was last quoted at $1.75 over benchmark West Texas Intermediate, up 25 percent from Wednesday's settlement, according to Shorcan Energy Brokers.

Suncor Energy Inc and Syncrude Canada Ltd, which together account for more than half of the light synthetic oil derived from the Alberta tar sands, both reported lower output for November.

Suncor said production during the month averaged 318,000 barrels per day, down 18,000 from October, due to unplanned maintenance.

Syncrude's November output averaged 283,300 bpd, down 12 percent from the previous month, according to Canadian Oil Sands Ltd, which has the largest interest in the Syncrude joint venture.

That followed word a day earlier that Syncrude had told customers output in December would be down from forecast volumes by 400,000 barrels as cold weather affected operations.

Western Canada Select heavy blend was quoted at $32 a barrel under WTI, a $2.40 deeper discount from Wednesday.

Exxon Mobil Corp said on Thursday it had shut down its 90,0000 bpd Pegasus pipeline for maintenance. The line carries crude, including Canadian heavy, to Texas refineries from Patoka in southern Illinois. It is expected to be off line until December 17.

Meanwhile, sources told Reuters that the 146,000 bpd Borger, Texas, refinery, owned by Phillips 66 and Cenovus Energy Inc, was having trouble with its gasoline-producing fluidic catalytic cracking unit. The refinery can run 35,000 barrels a day of heavy crude.

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