Canada crude -Heavy and synthetic grades weaken further
Canadian producer MEG Energy says the terminal allows MEG to ship all of its 30,000 to 35,000 bpd of production by rail to its main market in the U.S. Midwest, as well as the Gulf Coast and Eastern Canada. “With the massive rail network on the continent it could be to any potential refinery that has interest in that feedstock and has offloading facilities,” spokesman Brad Bellows said. “We have seen a lot of interest, particularly from the Gulf Coast.” NEW LINES The initial supply pipeline into Bruderheim will run from MEG’s newly operational, 900,000-barrel Stonefell storage terminal, with other producers also able to move crude through that facility. Cenovus Energy Inc is also signed up as a shipper from Bruderheim, which is served by Canadian Pacific and Canadian National railways. Cenovus will start moving its Cold Lake crude blend from the terminal once the second supply pipeline is connected to its projects in northern Alberta next year, and once its own heated and coiled rail cars are delivered in the latter part of 2014. “We are targeting moving about 30,000 bpd of our oil production by rail by the end of 2014,” a Cenovus spokeswoman said. “That will be through the Bruderheim terminal, with some also coming from Saskatchewan and southern Alberta.” RAW FUTURE The unit trains at Bruderheim will use heated and coiled rail cars even for dilbit to prevent it becoming more viscous in bitterly cold Canadian winter temperatures. Heated and coiled cars are essential for transporting raw bitumen, which Kubera said the terminal could eventually start shipping depending on demand, in a move that should boost profits for producers. “We think in the long term that is the one model that will allow crude by rail to compete with pipelines. Raw bitumen or near-raw bitumen is the better option for crude by rail,” he said.
The focus of the market remained the U.S. government shutdown, which highlighted the political gridlock in Washington over the debt crisis and the uncertainty investors are facing as no immediate resolution seemed in sight. “Who knows what’s going to happen or how long it’s going to drag out,” said Sal Masionis, stockbroker at Brant Securities. “You just stay away and do nothing, and have a little cash on the side.” Investor confidence in Canada and the United States has taken a beating, he said, adding that the uncertainty could drag on until the end of the month. Volumes on the benchmark Canadian index were sluggish. About 56 million shares changed hands on Thursday at mid-morning, compared with an average daily volume of 304 million shares in September, according to market operator TMX Group. The Toronto Stock Exchange’s S&P/TSX composite index was down 49.74 points, or 0.39 percent, at 12,789.26. The TSX could lose ground before the end of the year due to the U.S. debt and budget troubles, Masionis said. Eight of the 10 main sectors on the index were in the red on Thursday. Suncor Energy Inc lost 1.1 percent to C$36.40 and had the biggest negative influence on the market. Canadian Natural Resources Ltd gave back 0.3 percent to C$32.13. The materials sector, which includes mining stocks, slipped 0.3 percent despite small gains made by gold stocks.
Canada Stocks Fall to a Three-Week Low Amid U.S. Budget Impasse
and that really determines what happens in Canada, said Anish Chopra, fund manager with TD Asset Management Inc. in Toronto. His firm manages about C$216 billion ($209 billion). In the past theyve been able to get to last-minute deals. In this case it might be more of a comprehensive package that includes the debt ceiling. The problem is the ceiling may not be exactly Oct. 17, it could be later and thats a long way away. The first face-to-face talks between U.S. President Barack Obama and congressional leaders failed to break the budget logjam as a partial U.S. government shutdown entered its third day. The Oval Office meeting yesterday evening ended with both sides reiterating their positions and the points theyve been making for days, increasing the possibility for a prolonged standoff over the government shutdown and raising the U.S. debt limit. WestJet Falls WestJet declined 2.5 percent to C$25.41 as industrial stocks retreated 0.9 percent as a group. Nine of 10 industries in the S&P/TSX fell. Trading volume was in line with the 30-day average. WestJet, based in Calgary, reported a September load factor of 76.6 percent, compared with a record 79.1 percent in the same period last year, the company said in a statement.
Western Canada Select heavy blend for November delivery last sold for $33.50 per barrel below the West Texas Intermediate benchmark, according to Shorcan Energy brokers. That compares with a settlement price of $32.85 per barrel below the benchmark on Wednesday. Light synthetic crude from the oil sands for November delivery last traded at $12.50 per barrel below WTI, compared with a settlement price on Wednesday of $11.75 below the benchmark. A ramping up of production at Imperial Oil’s Kearl project and strong output from Syncrude’s northern Alberta oil sands project have pushed differentials wider in recent weeks. Production from Canada’s largest energy company Suncor Energy Inc dipped in September however, falling 16 percent month-on-month to 365,000 barrels per day as a result of maintenance at its U2 upgrader. Market players said weaker refining margins meant there was less demand from refineries, while Shell Canada’s 100,000 bpd Scotford, Alberta, refinery, is also undergoing a full turnaround. “Margins are diminishing so refineries have lower utilization than in the last two or three months, which is putting pressure on pricing,” one Calgary crude trader said. “As we get more and more production coming out there are also logistical issues.” Pipeline company Enbridge Inc increased apportionment on its export network in October, and some market sources said there were concerns there could be more rationing ahead. Higher apportionment can push differentials wider on concerns that crude will get bottle-necked in Canada. Last winter congested export pipeline capacity and growing production meant WCS at times traded more than $40 per barrel below WTI, in what the Alberta government termed the “bitumen bubble”.