Permission to Restart Enbridge Pipeline Strengthens Canadian Crude Prices

The current crude prices of Canadian-priced oil strengthened with the preparation of Enbridge Inc. of the restart of its 318,000 bpd Line 14 pipeline. This line had been down for 12 days, when it broke and spilled about 1,200 oil barrels in a field in Wisconsin.

The current crude price of Western Canada Select heavy blend for delivery in September is $15.50 lower than the per barrel oil price of West Texas Intermediate crude. It is also cheaper compared to its latest settlement price, which is $18.75 below the per barrel oil price of WTI, said Shorcan Energy Brokers.

Light, synthetic crude (from tar sands) for delivery in September is trading at a price that is higher by $3 compared to WTI. That rate is higher compared to its most recent premium of 15 cents.

The higher crude prices were seen after Enbridge was allowed by regulators to restart Line 14, a line that transports crude from Canada to refineries in the Chicago area.

Enbridge has informed shippers that the line will be restarted but has not yet announced if it already is.

According to sources, even if the restarting of the line happens on schedule, it will still take at least a day for Enbridge to make a decision as to whether it can still cope with its schedule of delivery for September or if it will have to enact proportional distribution to buyers instead.

The price increase occurred at the same time as an announcement from Husky Energy and BP Plc that they plan to begin a planned maintenance turnaround period that will last for the whole month of September at Ohio’s 135,000 refinery, which they both own.

By: Chris Termeer