The United States imported record-high amounts of Canadian crude last week despite shutdowns at the Alberta oil sands Syncrude plant and transportation bottlenecks. Savage Tankers photo by email@example.com.
Canadian crude output on the rise
According to a report by Bloomberg, the United States imported a record amount of Canadian crude last week, even though a major Alberta oil sands facility was offline and transportation bottlenecks continued to impact exports.
“The trend of increasing Canadian crude imports will continue as Canada’s output is increasing. And this will show up right next door into the U.S.,” Andy Lipow, president of Lipow Oil Associates LLC told Bloomberg.
American refiners imported 3.73 million barrels a day of Canadian oil during the week ending June 29, the largest volume according to weekly government data which goes back to June 2010.
With US refiners operating at record levels, total US crude imports hit 9.01 million b/d, the highest in over a year.
Canadian crude supplies are rising, but pipeline capacity from Western Canada to the United States is strained. Some of the extra volume has been shipped via rail, however, Canadian oil producers are looking for more economical modes of transportation to get their oil to market.
The pipeline and rail bottlenecks have forced Canadian crude prices down.
Lipow says the US market probably hasn’t seen the effects of the Syncrude shutdown yet. “They were shipping out what was in inventory in Edmonton and Hardisty,” Lipow said. “We won’t see the impact until next week and the following weeks.”
Last week, Syncrude told its customers that it would only be able to ship 8 per cent of its volume intended for July because the upgrader which was crippled by a power outage will not be back in service until after July 26.
Enbridge learned recently that it had cleared its final regulatory hurdle after the Minnesota Public Utilities Commission approved a certificate of need for the Calgary-based company to rebuild its aging Line 3 pipeline.
Once complete, the pipeline transporting crude from Alberta to the US Midwest will carry 760,000 barrels per day.