Syncrude cuts April production to zero, opens door for Mexico

|By:, SA News Editor

Canadian crude shipments to the U.S. are poised to shrink after the Syncrude oil sands project tells customers they will not receive any supply during April from its 350K bbl/day upgrader, Bloomberg reports.

Syncrude has cut its production to zero for all of April following a fire last month, according to the report, yesterday sending Western Canadian Select crude to its highest level since June 2015, when wildfires in Alberta disrupted production.

The loss of the Canadian shipments comes as U.S. refiners are returning from seasonal maintenance and shipments from the Middle East are declining; analysts say Mexico stands to benefit from the disruption, as the higher heavy Canadian crude prices make Mexico's similar Maya grade more attractive to U.S. Gulf Coast refiners.

Syncrude is majority owned by Suncor Energy (SU +0.4%), with other partners including Imperial Oil (IMO +1.2%), Murphy Oil (MUR +1.4%), Sinopec (SNP +0.8%) and Cnooc's (CEO +0.8%) Nexen.