Copyright of the Daily Oil Bulletin 2017
Heavy Grades Widen After Keystone Pipeline Leak
(Reuters) — Canadian heavy crude differentials widened on Thursday after an oil leak on TransCanada Corporation's Keystone pipeline shut down one of Canada's main crude export routes to the United States.
Western Canada Select (WCS) heavy blend crude for December delivery in Hardisty widened to $14.65 below the West Texas Intermediate (WTI) benchmark, according to Shorcan Energy Brokers, the deepest discount since March. That compared to Wednesday's settle of $14.20 below WTI.
Heavy crude for January delivery also weakened to $15.50 under the benchmark, from $15.10 below WTI the previous day.
Thursday is the final day of the Canadian crude trading window, which lasts from the first of each month until the day before pipeline nominations are due, and market volumes were thin as a result.
Traders said it was unclear how long the 590,000 bbl/d pipeline, which delivers crude from Hardisty to Steele City, Nebraska, and Cushing, Oklahoma, would be out of service. A prolonged shutdown could push differentials wider on concerns about a glut of crude building up in Alberta.
Light synthetic crude from the oilsands for December delivery last traded at $2.70 over WTI, climbing slightly from Wednesday's settle of $2.60 over the benchmark.
Royal Dutch Shell plc said there was a heavy oil hydrocarbon leak at its Scotford facility on Wednesday, which houses a 100,000 bbl/d refinery and Shell's 255,000 bbl/d upgrader.
The company did not give details on whether production was affected or the extent of any damage.