Wet weather and an influence outage at a serious oil sands producer have contributed to crude export supply tightness out of Western Canada, that might tighten supplies to the important thing Cushing storage hub in Oklahoma and to U.S. Midwest refineries.<\/p>\n
Supply disruptions \u200cin Western Canada are adding to an already tight global market as a fifth of the worldwide oil and \u2060gas shipments are stuck behind the Strait of \u200cHormuz resulting from the U.S.\/Israel war in Iran.<\/p>\n
U.S. crude inventories, including those from strategic reserves, have fallen by 79 million barrels for the reason that Iran war \u2060began in late February, with inventories at Cushing nearing operational lows.<\/p>\n
Canada is the world\u2019s fourth-largest oil producer, \u200cand the most important foreign supplier of crude oil to the U.S., with the oil flowing into storage tanks at Cushing and \u2060to Midwest and Gulf Coast refineries.<\/p>\n
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The U.S. \u200cMidwest refiners, which don’t have any access to waterborne crude, are heavily depending on Canadian oil and most of the region\u2019s refineries have been designed to handle oil sands crude.<\/p>\n
\n\t\t\t\t\tRefineries within the U.S. \u200cMidwest, which don’t have any access to waterborne crude supplies, are heavily depending on Canadian oil and most of the region\u2019s refineries have been designed to handle oil sands crude.\t\t\t\t<\/span>
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But recent heavy rains in northern Alberta have temporarily slowed the pace of oil sands mining, while an influence outage last week at Cenovus Energy\u2019s Foster Creek and Christina Lake operations prompted the \u200ccompany to declare a force majeure, three sources told Reuters.<\/p>\n
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The ability outage temporarily took about 10 per cent of the corporate\u2019s oil sands production \u2060offline, in keeping with an Energy Elements research note last week.<\/p>\n
Cenovus didn’t immediately reply to a request for comment.<\/p>\n
Canadian crude has also been in high demand for the reason that war in Iran began, especially from Asian buyers who see the country as a secure, secure source \u200bof supply.<\/p>\n
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Canada\u2019s Trans Mountain pipeline, which transports Canadian heavy oil to the Pacific \u200bcoast for export overseas, including to Asia, is running at full capability for the primary time for the reason that completion \u200cof a serious expansion two years ago.<\/p>\n
Western Canadian crude inventories are at their lowest level since 2020, Wood Mackenzie analyst Lee Williams said.<\/p>\n
\u201cAs of last week, Western Canadian crude \u2060inventories had decreased by greater than 4 \u200cmillion barrels over the past two weeks and by nearly 8 million barrels for the reason that end of February,\u201d \u200cWilliams said in an email.<\/p>\n
Canadian \u200bheavy crude prices have strengthened significantly within the last week-and-a-half, with \u2060the discount \u2060on Western Canada Select to North American benchmark West Texas Intermediate narrowing by roughly $4 for the reason that end of May.<\/p>\n
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