Canadian oil soars after Enbridge’s shipping move
Canadian crude surged by the most ever after Enbridge Inc. said it won’t implement a new procedure to stop shippers from claiming more space than they can use on a key pipeline linking Alberta’s oilsands with U.S. refineries.
Western Canadian Select jumped as much as US$12.20 a barrel to US$13.80 below the U.S. benchmark Monday, the narrowest spread since May 16. Canadian crudes have weakened to historically low levels in recent weeks as growing production overwhelms available pipeline capacity to transport Alberta’s supplies south of the border.
Canada’s biggest crude-export pipeline operator told shippers Monday that it won’t proceed with the recent rules setting an allowance for the amount of crude firms could nominate for transport on its mainline. The move came after talks with shippers, Enbridge said.
Tim Pickering, chief investment officer at Auspice Capital Advisors Ltd., said the Enbridge turnabout shows that “the pipelines can’t just do changes that aren’t fair and are not conducive” to its customers.
The National Energy Board, Canada’s pipeline regulator, didn’t intervene on the Enbridge matter and received no complaints, spokeswoman Chantal Macleod said in an email.
“Enbridge’s mainline system continues to be oversubscribed,” Enbridge said in a statement. “We have been engaged with our customers to improve the nomination process and will continue to work directly with them on this issue.” Bloomberg