in ,

Refiners in the U.S. Could Start Purchasing More Crude From Canada

oil and gas exports

With the huge releases from the United States Strategic Petroleum Reserve (SPR) ending in October, traders and analysts say that U.S. refiners will start buying large volumes of Canadian crude again, which could lead to an increase in the price of Canada’s benchmark heavy oil.

In March, the U.S. Administration authorized the release of 1 million bpd from the SPR for six months to reduce oil prices and promote domestic production under contracts with corporations to purchase future oil at fixed prices. This in response to Russia’s invasion of Ukraine and following Western sanctions, which have increased oil and gas prices.

Since the 180-million-barrel SPR release over six months is largely sour crude, the discount of Western Canadian Select (WCS) relative to the U.S. benchmark WTI has increased this summer.

U.S. refiners are planning to increase their imports of oil from Canada and other producers of sour and heavy crude as a result of the anticipated ending of the SPR releases next month.

“When the SPR releases finish, these refiners will look to lean harder again on Canadian barrels or seaborne imports,” said lead oil analyst for the Americas at Kpler, Matt Smith.

That, according to market analysts, would reduce the discount between the Canadian oil benchmark and the U.S. benchmark.

Original source material for this article taken from here

What do you think?

19 Points
Upvote Downvote

Written by Olivia Woods

Leave a Reply

Your email address will not be published.

GIPHY App Key not set. Please check settings

oil and gas site

Canadian Supporters of Windfall Tax on Oil and Gas Look to the EU for Guidance

Evan Siddall

AIMCo CEO Opposes Fossil Fuel Divestment