By Nia Williams
CALGARY, Alberta, May 13 (Reuters) - Western Canadian crudestocks dropped by almost 1 million barrels last week and coulddecrease further due to massive wildfires in northern Albertathat shut down nearly half of oil sands output, energyintelligence firm Genscape said on Friday.
Companies including Suncor Energy and Imperial Oil shut in more than a million barrels a day of productionas a precaution against an uncontrolled blaze that forced all88,000 residents of nearby Fort McMurray to flee the town 10days ago.
Data from the week ending May 6 showed crude inventoriesmonitored by Genscape in Edmonton and Hardisty, Alberta, andKerrobert, Saskatchewan, fell to 25.6 million barrels, down 4percent from the previous week and 10 percent from record levelsa month earlier.
The vast majority of projects affected by the wildfire arestill offline or in the process of restarting operations, andmany industry players expect to see another draw next week.
Genscape analyst Dylan White said the inventory draws werelikely to be short-term as production returns, but there weremany variables at play.
Since last Friday's data companies such as Statoil ASA and Husky Energy have announced completeshutdowns at some oil sands projects, while Shell Canada said production had resumed at very reduced rates atits Albian Sands mine site.
"Stocks could decrease in the next month due to seasonaltrends and normal fluctuation, but long-term draws are notexpected as a result of the recent wildfires," White said.
Traders in Calgary said the draw on storage inventories hadhelped dampen moves in price differentials, which strengthenedduring the wildfire outages but have not moved as dramaticallyas they did during smaller wildfire production cuts last year.
Light synthetic crude from the oil sands for June deliverylast traded at $1.10 per barrel above the West TexasIntermediate benchmark, according to Shorcan Energy brokers, upfrom 95 cents a barrel over the benchmark on Thursday.
Western Canada Select heavy blend crude for June deliverytightened to $11.90 per barrel below WTI, having settled at$12.30 per barrel below the benchmark the previous day. (Editing by David Gregorio)
