The Canadian heavy oil benchmark rose on Wednesday after a pipeline carrying diluent necessary for oil sands production was shut down following a leak over the weekend, affecting production at a project operated by an Exxon subsidiary.
The discount of Western Canadian Select (WCS) – the benchmark price of oil from Canada’s oil sands delivered at Hardisty, Alberta – relative to the U.S. benchmark WTI Crude narrowed to below $10 a barrel for the first time since August 17, 2020.
According to Bloomberg estimates of NE2 Group data, the October contract of Western Canadian Select closed at $31.86, while WTI Crude settled at $41.51.
The shutdown of the pipeline carrying diluent has affected production at the Kearl oil sands project of Imperial Oil, which is majority-owned by Exxon-Mobil.
Inter Pipeline, the operator of the diluent pipeline, that it had detected a leak along its pipeline systems east of the Fort McMurray Airport, so Inter Pipeline had to shut down and isolate its Polaris and Corridor pipeline systems.
The partial shutdown of the Polaris pipeline affected production at Imperial’s Kearl facility, which has ceased all production.
The facilities remain ready to ramp up to full production rates once the diluent pipeline is back in service and diluent supply is restored.
But@ this point, it is not clear when diluent supply will be restored, a spokeswoman for Inter Pipeline told The Canadian Press.
Oil Price.com / ABC Flash Point Sand Oil News 2020.
A fabricated move to push the oil prices up?
Exactly, what else is new?