Canadian synthetic crude prices weakened on Wednesday as strong supply from Syncrude's northern Alberta oil sands project outweighed a production cut resulting from ongoing maintenance at Suncor Energy Inc's operations.
Light synthetic crude from the oil sands for October delivery was last trading at $2.75 per barrel below the West Texas Intermediate benchmark, according to Shorcan Energy brokers.
That compares with a settlement price of $1.65 per barrel below the benchmark on Tuesday.
Synthetic prices have fallen from a premium to WTI since a coker at Syncrude's oil sands project came back online in August, boosting supply.
Syncrude is a joint venture of Canadian Oil Sands, Imperial Oil Ltd, Mocal Energy, Murphy Oil Corp , Nexen Inc, Sinopec Corp, and Suncor.
"Syncrude is actually producing what they say," one Calgary trader said. "They are meeting forecasts for September so far."
In contrast, synthetic crude production at Suncor's northern Alberta operations has been reduced by 50,000 to 60,000 barrels per day during planned maintenance on an upgrader vacuum tower.
Seasonal refinery maintenance and increasing production from Imperial Oil's Kearl project near Fort McMurray, Alberta also helped pushed heavy oil prices lower.
Western Canada Select heavy blend for October delivery was last trading at $25.75 per barrel below WTI, compared with a settlement price on Tuesday of $25.15 below the benchmark.
A spokesman for Imperial Oil said Kearl is expected to reach full production capacity of 110,000 bpd later in 2013, and current production was around 50,000 to 60,000 barrels per day.
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