The U.S. imported a record volume of crude from its northern neighbour last week, even as the Canadian oil industry struggles to deal with widespread transportation bottlenecks.
“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.,” where refiners are operating at record high levels, said Andy Lipow, president of Lipow Oil Associates LLC in Houston, by phone.
In Canada, increasing supplies have strained southbound pipeline capacity, pressuring oil prices lower. Some of that volume has spilled into rail networks, but the market is crying out for more pipes as a more economical mode of transport for their supply.
Despite the bottleneck, American refiners took 3.73 million barrels a day of Canadian oil for the week ending June 29, the largest volume in weekly government data going back to June 2010. The boost helped thrust total U.S. crude imports to 9.01 million, the highest in over a year.
The unplanned shutdown two weeks ago of Syncrude Canada’s oilsands upgrader, a key supplier of light sweet crude to U.S. refiners, hasn’t yet stemmed Canadian exports.
“We probably haven’t seen the effects of the Syncrude Canada 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, the company advised customers that it would ship just 8 percent of the volume intended for July because its upgrader would resume service after July 26.
Bloomberg.com
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