Canadian heavy crude weakened against West Texas Intermediate for a second day as oil sands producers returned to work after a forest fire.
Western Canadian Select crude’s discount to the North American benchmark widened 85 cents to $8.15 a barrel Thursday, data compiled by Bloomberg show. The discount shrank to $7 on June 2, the narrowest since 2009, after a blaze in Northeastern Alberta prompted the shutdown of about 230,000 barrels a day of oil sands production. The price of WCS fell $2.49 to $49.85 a barrel.
“Prices will widen out a bit,” Amir Arif, an analyst at Cormark Securities Inc. in Calgary, said by phone. “But the pricing for heavy oil will still remain very robust.”
Cenovus Energy Inc. said its 135,000-barrel-a-day Foster Creek oil sands site, the company’s largest, will be fully operational by Monday after it was shut more than a week ago because of the blaze. Canadian Natural Resources Ltd. said Wednesday it was ramping up production at its Kirby South oil sands site after a pipeline resumed operation.
The wildfire near Cold Lake that prompted the shutdowns was 60 percent contained Wednesday, up from 44 percent on Tuesday, Alberta Forest Information Officer Leslie Lozinski said in an late Wednesday, with containment expected in two days. Firefighters were moving from the perimeter to the center of the blaze putting out fires, she said Thursday.
CNRL raised output at Kirby South after production was reduced by 18,000 barrels a day early last week because of the blaze. The company’s 80,000-barrel-a-day Primrose site remained down Wednesday, the company said in an e-mailed statement.
Cenovus discovered a “minor equipment fire” late Wednesday at a gas well at its Athabasca gas operations, according to an update posted on a company website. The blaze was caused by the wildfire and the company was waiting for regulatory clearance for a helicopter to extinguish it.