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US refiners target crude-by-rail as spread widens

11.05.2013  | 

The discount widened as the Syncrude upgrader returned from maintenance last month. It produced 308,300 bbl of synthetic light, sweet crude a day in October, the most since April, according to the website of Canadian Oil Sands Ltd., the plant’s operating partner. Phillips 66 is now moving more crude by rail.

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By DAN MURTAUGH and ELIOT CAROOM
Bloomberg

Bakken crude in North Dakota slipped to an eight-month low against European imports, prompting a US East Coast refiner to increase crude-by-rail shipments.
 
Plains Marketing LP’s Williston Basin sweet oil posted price weakened to $29.51/bbl less than Dated Brent on Nov. 1, the widest discount since March 6.
 
The discount, which compares field prices in North Dakota to the European benchmark that many waterborne crudes are priced against, narrowed to $10.52/bbl on July 19 as the Syncrude upgrader in Alberta reduced production during maintenance after a fire.
 
The discount widened as the Syncrude upgrader returned from maintenance last month. It produced 308,300 bbl of synthetic light, sweet crude a day in October, the most since April, according to the website of Canadian Oil Sands Ltd., the plant’s operating partner.
 
Phillips 66 is moving more crude by rail, company executives said on an Oct. 30 conference call.
 
“Today, rail movements for us showed, in total, are probably a little less and 100,000 barrels a day or so, but clearly we’re ramping up our capacity,” CEO Greg Garland said.
 
The company cut crude-by-rail shipments to its Bayway refinery in New Jersey to 30,000 bpd in August or September from 100,000 in the second quarter as the spread narrowed, Tim Taylor, the company’s executive vice president of commercial, transportation, business development and marketing, said on the same call.



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