MARKET WATCHSupply factors affect energy prices
Energy prices dipped Apr. 16 with a variety of incidents affecting supplies of crude and petroleum products.
HOUSTON, Apr. 17 -- Energy prices dipped Apr. 16 with a variety of incidents affecting supplies of crude and petroleum products.
Enbridge Inc. in Calgary shut in part of its 34-in., 490,000 b/d oil pipeline that is the main route for Canadian crude going to refineries in the US Midwest. Enbridge's mainline is the world's longest oil and liquids pipeline system.
The partial shut-in occurred when a pressure drop alerted workers to a release of heavy crude in a field 2.5 km downstream of Enbridge's Glenavon pumping station in Saskatchewan. The oil is contained in a low area at the site, and Enbridge said it is working to minimize environmental impact.
The volume of the release was not known, however, nor the cause, which is currently under investigation. Initial clean up is expected to be completed within a few days but there is not yet an estimate of when the pipeline will be restarted. Enbridge is continuing to inject Midale and Light Sour Blend volumes from its Cromer, Man.
News of the pipeline leak offset some of an earlier price drop on news that Royal Dutch Shell PLC will resume production from its 380,000 b/d Forcados field in Nigeria by the end of this month. Shell shut in 455,000 b/d of Nigerian production back in February following attacks by militants on its facilities and workers in the western Niger Delta (OGJ Online, Feb. 22, 2007).
Separately, Valero Energy Corp. announced Apr. 16 that its 158,000 b/d McKee Refinery in Sunray, Tex., is now in operation. "The crude unit and reformer are up, and the refinery is processing crude. We are still in the process of recommissioning the refinery, and this process may take several days, but we still expect to achieve 85,000 b/d of throughput by the end of this month," said a company spokesman. A propane fire seriously burned three workers and forced the facility to shut down Feb. 16.
The May contract for benchmark US sweet, light crudes slipped by 2¢ to $63.61/bbl Apr. 16 on the New York Mercantile Exchange. The June contract dropped 66¢ to $65.67/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., gained 21¢ to $63.85/bbl. The May contract for reformulated blend stock for oxygenate blending (RBOB) fell 6.4¢ to $2.12/gal on NYMEX. Heating oil for the same month lost 4.14¢ to $1.86/gal. The May natural gas contract fell 27.1¢ to $7.53/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., dropped 29.5¢ to $7.64/MMbtu.
In London, the June IPE contract for North Sea Brent crude lost $1.38 to $67.25/bbl. Gas oil for May declined $12.50 to $591.50/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes lost 78¢ to $63.93/bbl on Apr. 16.
Contact Sam Fletcher at firstname.lastname@example.org.