Canada crude-Heavy strengthens as Kearl start-up drags

Wed Mar 6, 2013 5:50pm EST

Related Topics

* April WCS quoted at $23 under WTI
    * April synthetic $5.50/bbl over WTI
    * Saskatchewan refinery plans 6-week turnaround

    CALGARY, Alberta, March 6 (Reuters) - Canadian heavy crude
spreads tightened on Wednesday as the market weighed Imperial
Oil Ltd's delay in starting up its Kearl oil sands
project in Alberta, trade sources said.
    Western Canada Select heavy blend for April delivery last
sold for $23 a barrel under benchmark West Texas Intermediate,
the smallest discount in about three weeks, according to Shorcan
Energy Brokers. That compares with a Tuesday settlement of
$24.75 under WTI.
    Traders have been surprised by the strength in WCS heavy as
major fundamentals have changed little since discounts in
January that topped $40 a barrel at times.
    Influencing factors include tight pipeline capacity and
growing industry-wide production, in addition to maintenance at
some large Canadian and U.S. refineries.
    However, Imperial has delayed the start-up of the 110,000
barrel a day Kearl project from an initial target of the late
2012, keeping large expected volumes off the market.
    Most recently, the company has said it expects commercial
production before the end of the month, though the ramp-up is
projected to be gradual.
    April light synthetic crude was quoted at $5.50 a barrel
over WTI, down $1 from Tuesday.
    In refinery news, Federated Co-operatives said it expects to
start a six-week maintenance outage at its 145,000 barrel a day
Regina, Saskatchewan, refining complex at the end of this month.
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