Canadian oil exports to U.S. drop, traders say

Canadian crude oil exports to the United States have declined due to lower world oil prices, a severe winter and synthetic crude processor maintenance, industry sources said on Wednesday.

One trader said crude oil exports could drop as much as 300,000 barrels per day by the end of spring, or about 15 percent of total crude exports of 2 million bpd. Others said the decline was smaller.

As much as 75,000 barrels a day of dropoff is due to maintenance work on a coker at Syncrude Canada Ltd, which processes synthetic Canadian crude oil.

Enbridge,the biggest pipeline shipper of Canadian crude into the United States, said its pipeline is flowing virtually full at 1.5 million barrels per day.

Canada is the largest source of U.S. imported oil, accounting for 21 percent of crude oil imports in December, the U.S. Energy Information Administration said.

“They had to cut back when crude got down into the $30’s and still had a discount of $6 to $8 on Canadian heavy,” a trader said. “They’ve had a severe winter in Alberta.”

Analyst Jim Ritterbusch, president of Ritterbusch & Associates, said U.S. storage at Cushing, Oklahoma, dropped as much as 300,000 barrels this week due to Canadian cuts.

Analyst Martin King of FirstEnergy said he doubted any Canadian oil production was being shut in Canada due to prices or weather and said the dropoff is much smaller.

“It’s not big,” King said.

The trader said the drop could be smaller but he saw evidence of a slowdown in Canadian heavy oil production on top of the Syncrude maintenance impact and said it could persist.

“With prices low, there’s little incentive to perform maintenance. It’s still cold. Then, with spring thaw, they load trucks half full,” the trader said.



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