* WCS for May delivery last traded at $14.75/bbl under WTI
* May synthetic last seen at $7.50/bbl above WTI
CALGARY, Alberta, March 26 Canadian oil prices
rose to the highest levels in more than five months on Tuesday
in thin trading on strengthening demand and delayed new
Western Canada Select heavy blend for May delivery last
traded at $14.75 per barrel below West Texas Intermediate
according to Shorcan Energy Brokers. That compares with the
settlement price on Monday of $16.40 below the benchmark.
Synthetic crude from the oil sands for May delivery last
traded at $7.50 above WTI. Synthetic settled on Monday at $6.50
above the benchmark.
Prices for both crudes are the highest since October 12 and
come as asphalt demand rises at the start of the summer paving
season, increasing the use of heavy oil.
As well, synthetic supplies in May could be constrained by a
planned maintenance shutdown at Suncor Energy Inc's
100,000 barrel per day Upgrader 1 unit at its northern Alberta
project site expected to be carried out in the second quarter.
Despite the current strength of Canadian oil, some observers
warned that prices could weaken as Imperial Oil Ltd
ramps up production at its 110,000 bpd Kearl oil sands mine.
"I think the differentials you're seeing now may exaggerate
the strengths to some degree. You haven't seen the supply ramp
up from things like Kearl yet, and we do have some maintenance
going on at some of the oil sands operations," said Martin King,
an analyst at FirstEnergy Capital.
"Once all of that stuff gets back in the groove here over
the next 30 days, allowing for Kearl to ramp up, then I think
you'll see differentials start to come back out again."
Kearl is expected to begin limited production by the end of
month but it could be weeks before any of its oil enters the
market. The company said it must first fill storage tanks and
the pipeline that serves the project, a process that could take
as long as 90 days.