By Nia Williams
CALGARY, Alberta, May 13 (Reuters) - Western Canadian crude
stocks dropped by almost 1 million barrels last week and could
decrease further due to massive wildfires in northern Alberta
that shut down nearly half of oil sands output, energy
intelligence firm Genscape said on Friday.
Companies including Suncor Energy SU.TO and Imperial Oil
IMO.TO shut in more than a million barrels a day of production
as a precaution against an uncontrolled blaze that forced all
88,000 residents of nearby Fort McMurray to flee the town 10
days ago.
Data from the week ending May 6 showed crude inventories
monitored by Genscape in Edmonton and Hardisty, Alberta, and
Kerrobert, Saskatchewan, fell to 25.6 million barrels, down 4
percent from the previous week and 10 percent from record levels
a month earlier.
The vast majority of projects affected by the wildfire are
still offline or in the process of restarting operations, and
many industry players expect to see another draw next week.
Genscape analyst Dylan White said the inventory draws were
likely to be short-term as production returns, but there were
many variables at play.
Since last Friday's data companies such as Statoil ASA
STL.OL and Husky Energy HSE.TO have announced complete
shutdowns at some oil sands projects, while Shell Canada
RDSa.L said production had resumed at very reduced rates at
its Albian Sands mine site.
"Stocks could decrease in the next month due to seasonal
trends and normal fluctuation, but long-term draws are not
expected as a result of the recent wildfires," White said.
Traders in Calgary said the draw on storage inventories had
helped dampen moves in price differentials, which strengthened
during the wildfire outages but have not moved as dramatically
as they did during smaller wildfire production cuts last year.
Light synthetic crude from the oil sands for June delivery
last traded at $1.10 per barrel above the West Texas
Intermediate benchmark, according to Shorcan Energy brokers, up
from 95 cents a barrel over the benchmark on Thursday.
Western Canada Select heavy blend crude for June delivery
tightened to $11.90 per barrel below WTI, having settled at
$12.30 per barrel below the benchmark the previous day.
(Editing by David Gregorio)