The Financial Post reports a shortage of Canadian synthetic crude, the result of outages at oil sands operations, has resulted in premium prices for Canadian varieties in May of as much as US$15 a barrel over the U.S. benchmark, West Texas Intermediate, energy investment dealer Peters & Co. said in a note to clients.
The energy investment dealer said the hefty premium, primarily for Edmonton Par, is a significant departure from the discounts of about US$12 a barrel experienced in February. Prices were depressed at the time because of pipeline bottlenecks in the U.S.
“The large premium is due primarily to a supply shortage of synthetic crude in oil resulting from outages as plants like Canadian Natural Resources Ltd.’s Horizon, which is under repair following a fire in January.
Meanwhile, wildfires through northern Alberta have forced companies to reduce production by about 150,000 barrels a day.”