Canadian synthetic crude extended its premium to the West Texas Intermediate (WTI) benchmark on Monday, while the discount on Canadian heavy crude edged wider.
Light synthetic crude from the oil sands for April delivery last traded at $5.25 barrel above the West Texas Intermediate (WTI) benchmark, according to NE2 Canada Inc, climbing 25 cents from the Friday’s settle.
On outright basis Canadian synthetic crude was worth more than $124 a barrel, as global benchmarks jumped higher. The United States and European allies are considering banning Russian oil imports, while it looks less likely that Iranian crude would return swiftly to global markets.
Western Canada Select (WCS), the Canadian heavy benchmark grade, traded at a discount of $12.95 a barrel below WTI, widening 5 cents from Friday. That put the outright price of WCS at around $106 a barrel, close to the all-time high of $107 a barrel hit in June 2008.
Maintenance season in northern Alberta’s oil sands is already contributing to tighter supply of synthetic crude, and that will intensify in May when Canadian Natural Resources Ltd’s Horizon upgrader and Suncor Energy’s U2 upgrader start turnarounds.
A 65-day turnaround at Shell’s Scotford upgrader starts in March.
The premier of Alberta said producers in the oil sands province could ramp up production to help ensure North American energy security as oil prices soar, and suggested reviving the cancelled Keystone XL pipeline.