The Keystone crude pipeline, a vital artery transporting Canadian oil to markets in the US and overseas, is operating at about half of its capacity Tuesday after being halted for maintenance work.
The line returned to service Tuesday night after being taken offline earlier in the same day, according to people with knowledge of the situation, who asked not to be identified. It’s currently transporting close to 300,000 barrels a day — about half of its capacity of nearly 600,000 barrels a day — the people said, citing data from Wood Mackenzie Ltd. Decreased power consumption was observed at the line Wednesday morning.
The disruption contributed to Canadian heavy crude’s discount in Alberta to the US benchmark West Texas Intermediate widening 85 cents to $20.60 a barrel, the first time it has exceeded $20 since February, data compiled by Bloomberg show.
The conduit takes oil from Canadian oil sands to refineries in the US Midwest and Gulf Coast, from where it also reaches overseas markets. The line returning to service also means oil can resume flowing into Cushing, Oklahoma, the delivery point for US crude futures, where supplies have dwindled.
Buyers of Canadian oil can also breathe a sigh of relief as drillers prepare to ship 11 million barrels of heavy Canadian crude this month. Ports in Texas are the main outlet to ship heavy oil to refiners in China and Spain.
Read more: Canadian Oil Exports via US Gulf Ports Surge as World Hunts for OPEC Alternatives
TC Energy Corp., operator of Keystone, didn’t immediately return an email seeking comment but the company said on Tuesday it regularly conducts maintenance and occasionally operates the system at reduced rates during work.
(Updates with Canadian oil prices in third paragraph)
Author: Robert Tuttle, Devika Krishna Kumar and Lucia Kassai
