Western oil prices slip as Keystone pipeline leak cleanup continues
Prices for Western Canadian Select oil continued to soften on Monday as TC Energy Corp. reported recovering about half the crude that leaked from its Keystone pipeline in North Dakota last week.
Spokesman Terry Cuhna says about 4,300 barrels of oil have been recovered from the 9,120 barrels initially estimated to have leaked from the pipeline into a field near Edinburg, N.D., but there’s still no firm estimate of when it will be restored to service.
About 200 personnel are on site working on cleanup and remediation. TC Energy says the company expects to expose and extract the damaged section of pipe by the end of the week and send it to a government-approved laboratory for inspection.
Meanwhile, the loss of 590,000 barrels per day of pipeline capacity is being linked to deeper discounts for WCS, a blend of oilsands bitumen and lighter oil.
Oil brokerage Net Energy Exchange reports the discount to New York-traded West Texas Intermediate widened to US$22.35 per barrel on Monday, its weakest level this year. That’s up from US$22.00 on Friday and more than $5 higher than before the pipeline incident.
In a note, analyst Michael Tran of RBC Capital Markets says there’s enough unused storage in the western Canadian oil handling system to mitigate impact of the outage for about 20 days but more rail would be needed to relieve pressure if the pipeline remains offline much longer.
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