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Canada crude - Heavy grades soft as pipeline rationing announced

Thu, 21st Nov 2013 22:59

* Dec WCS trades at $36.00/bbl below WTI

* Dec synthetic trades at $13.00/bbl below WTI

* Enbridge announces December apportionment

CALGARY, Alberta, Nov 21 (Reuters) - Canadian heavy crudeprices held near multi-month lows on Thursday, with some tradersciting concerns about increased congestion in one of EnbridgeInc's main export pipelines to the United States.

Western Canada Select heavy blend for December delivery lasttraded at $36.00 per barrel below the West Texas Intermediatebenchmark, according to Shorcan Energy brokers, unchanged fromWednesday's settlement price.

Trading volumes were thin as the Canadian crude market is outside the nearly three-week-long trading "window" - betweenthe first of the month and the day before pipeline nominationsare due - when most trading takes place.

Prices have recovered slightly since hitting a 10-month lowof $41.50 per barrel below WTI on Nov. 5, but market players inCalgary said concerns about limited space on pipelines and crudegetting bottlenecked in Alberta meant gains were likely to belimited.

Enbridge, whose pipelines carry the bulk of Canadian crudeoil exports to the United States, said it will ration space onfive lines in December.

Although apportionment on four lines was reduced fromNovember, it rose on the 231,000 barrel per day Line 6B, whichruns between Griffith, Indiana, and Sarnia, Ontario.

Line 6B will be apportioned by 45 percent in December,meaning producers will only be able to ship 55 percent ofnominated volumes.

"It's a big number on a line that mostly carries heavycrude. It's certainly a problem for the industry as a whole. Itjust throws a wrench into everything," said one Calgary crudetrader.

Light synthetic crude from the oil sands for Decemberdelivery strengthened slightly to trade at $13.00 per barrelbelow WTI. On Wednesday, synthetic crude settled at $14.00 perbarrel below the benchmark.

Royal Dutch Shell Plc reported minor routinemaintenance at its 100,000 bpd Scotford refinery near Edmonton,Alberta, but said there would be no material impact onproduction.

Meanwhile, Imperial Oil Ltd said operations werenormal at its 187,000 bpd Strathcona refinery, also nearEdmonton, after flaring was reported.

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