On February 1, the outage of a transformer that provides electrical power to BP’s Whiting, IN refinery (capacity 435 Mb/d) resulted in a sudden and complete shutdown of the facility. Although power was restored the next day, the refinery remains shut down pending necessary checks and inspection of equipment that is required before a safe restart can be initiated. A restart date has not yet been determined, but as one of the largest importers of Canadian heavy oil in the U.S., the downtime has added another negative pressure point to the price of Canadian heavy oil.
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Lost Without You - Canada's Trans Mountain Pipeline Restarting After Three-Week Shutdown
Trans Mountain Pipeline, the only pipeline that connects crude oil production areas in Alberta to Canada’s West Coast and the U.S. Pacific Northwest, has started to resume operations after a three-week shutdown. The pipeline closure — the longest in TMP’s 68-year history — began November 14 after major flooding exposed portions of the 300-Mb/d conduit, which also carries some refined products. Fortunately, Trans Mountain did not suffer any severe damage, breaks, or spills, and its operators were able to initiate a phased restart on December 5 at reduced pressures. Full service is expected to be restored soon. So what happens when a primary source of crude oil to five refineries — four in Washington state and one in British Columbia — is removed from service with little notice? In today’s RBN blog, we discuss the impacts.
- Blog
Same Ol' Situation - Why Western Canada's Heavy Oil Discount Has Widened Again
The price discount for Western Canada’s benchmark heavy crude oil has seen yet another widening in the past few months. Increased pipeline access to the U.S. was believed to be the key to solving this problem in the long term, but more recent fundamental developments surrounding pipeline egress, refinery demand and increasing heavy oil supplies demonstrate that larger discounts can — and do — still happen. This problem could persist for several more months until a better balance is achieved in downstream markets. In today’s RBN blog, we discuss the latest drivers of the wider price discounts for Western Canada’s heavy oil.
- Blog
I Go to Extremes - The Non-Canadian Factors Behind the Latest Widening of the WCS-WTI Price Spread
Western Canada’s heavy oil producers have become all too familiar with fluctuating and often very wide price discounts for their product. Too often, the culprits have been insufficient pipeline export capacity and/or rapidly rising production. It might be easy to quickly dismiss the latest widening of the heavy oil price discount as being related to these well-known factors, but it turns out that other more international trends are at work, ranging from U.S. government-backed competition in the Gulf Coast to heavy discounting of competing barrels in other far-flung regions of the world. In today’s RBN blog, we look beyond the borders of Canada for an explanation of the latest pressures driving wider Canadian heavy oil price discounts.
