Canada crude-Short-covering lifts heavy grades

Mon Jan 14, 2013 1:51pm EST

Related Topics

* February WCS quoted at $39/bbl under WTI
    * February synthetic quoted at $0.35/bbl over WTI
    * Fire hits sweet crude unit at Wood River refinery-trader

    CALGARY, Alberta, Jan 14 (Reuters) - Canadian heavy crude
prices rose on Monday on some short-covering and expectations
that a weekend upset at a major U.S. Midwest refinery would have
a bigger impact on lighter grades.
    Western Canada Select heavy blend for February delivery last
sold for $39 a barrel under benchmark West Texas Intermediate, a
$1.75 narrower discount than the Friday settlement, according to
Shorcan Energy Brokers.
    Phillips 66 said on Sunday a crude distillation unit
at the 356,000 barrel a day Wood River refinery was shut
temporarily following a fire. 
    A trader pointed out, however, that the affected unit at the
plant, a major heavy crude processor that co-owned by Cenovus
Energy Inc, processes light, sweet crude.
    Another marketer said gains were likely the result of short
covering after two weeks of steadily deepening discounts for
Canadian heavy, which is being hit by tight export pipeline
capacity.
    The drop intensified last week after Enbridge Inc 
imposed mid-month apportionment on three of its Canada-United
States pipelines.
    When pipelines set apportionment, they reduce the actual
volumes that shippers can move from amounts nominated. Because
less crude can move through the pipeline, backlogs occur. 
    The 796,000 barrel-per-day Line 4, between Edmonton,
Alberta, and Superior, Wisconsin, and 450,000 bpd Line 67,
between Hardisty, Alberta, and Superior, are apportioned at 10
percent. Line 6A, which can carry 609,000 bpd between Superior
and Griffith, Indiana, is apportioned at 16 percent.
    Light synthetic crude, meanwhile, also strengthened on
Monday. February synthetic last sold for 35 cents a barrel above
WTI, compared with 20 cents under WTI on Friday.
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