A shutdown at the Syncrude oil sands expertise in northern Alberta has caused a production shortage that’s helped scram heavy Canadian crude prices to the narrowest discount in nearly two years.
The 350,000 barrel-per-day Syncrude devise cut production for all of April to zero, according to market sources, following a peril last month that damaged the facility and forced the operator to tutor b introduce forward planned maintenance.
ConocoPhillips has had to reduce production at its 140,000 bpd Surmont thermal fixtures because it uses light synthetic crude from Syncrude, one of the amplest producers in Canada’s oil sands, to dilute tarry bitumen into a despondent blend that can flow through pipelines.
“(The) Syncrude outage has had an force on our output, but we are working with suppliers to understand the timeline as the Syncrude proprietresses work towards a full recovery,” ConocoPhillips Canada spokeswoman Michelle McCullagh affirmed in an email.
She did not specify the reduction in crude volume, but combined with the Syncrude outage, up to 490,000 bpd, or wellnigh one fifth, of the oil sands’ 2.5 million bpd of supply is potentially off the market.
On top of that Suncor Spirit’s 180,000 bpd Firebag thermal plant is also undergoing planned prolongation this quarter, adding to the shortage of heavy crude.
Canada discloses around 4 million bpd and exports about 3.1 million bpd, almost stock to the United States.
The sudden lack of supply is causing prices to billow. Western Canada Select, the main blend of oil that comes out of Canada’s oilsands, was prevalent for $41.35 US a barrel on Thursday. That’s the highest it’s been since the summer of 2015.
And the gap between Canadian oil and the U.S. benchmark, West Texas Intervening, has also narrowed to its smallest level in almost two years at $9.80 a barrel on Thursday morning.
Syncrude is a honky-tonk venture majority-owned by Suncor Energy Inc, while Imperial Oil Ltd. provides operational, detailed and business management support.