WTS premium strongest since February
OREANDA-NEWS. West Texas Sour's (WTS) premium over WTI-Cushing is the strongest it has been since mid-February as refiners replace Canadian synthetic oil, which has been curtailed because of wildfires in Alberta, Canada.
June-delivered WTS traded at a premium of 20?/bl today after moving to a premium to WTI Cushing yesterday for the first time since early March. WTS traded at discounts to WTI Cushing for most of the session yesterday, but moved to a premium of 10?/bl late in the day.
Market participants have confirmed WTS is a viable substitute for Canadian synthetics. Canadian light synthetic grades are between 31.0-37.9°API with 0.06-0.20pc sulfur, while WTS API gravity is in the low 30?-range with nearly 2pc sulfur.
WTS can be shipped from west Texas on Sunoco's 300,000 b/d West Texas Gulf pipeline and then northward on the Mid-Valley pipeline. Husky Energy's 170,000 b/d refinery in Lima, Ohio, PBF's 170,000 b/d and BP's 157,000 b/d refineries in Toledo, Ohio, and Marathon Petroleum's 78,000 b/d refinery in Canton, Ohio, are accessible from the Mid-Valley pipeline.
WTS can also be shipped from west Texas to Cushing on the 144,000-400,000 b/d Plains/Enterprise Basin pipeline system or the 140,000 b/d Centurion pipeline. From Cushing, WTS can also reach Marathon's 240,000 b/d refinery in Catlettsburg, Kentucky, as well as Chicago area refiners via the 250,000 b/d Ozark pipeline. The Ozark pipeline is apportioned by 11.2pc for June after receiving adjusted nominations of 261,200 b/d because of Alberta wildfire impacts. The line was unapportioned from December through May.
The Toledo, Lima and Canton refineries combined took in 3.9mn bl of Canadian imports with API gravity ranging from 32?-39?, while Catlettsburg took in 2.9mn bl in February, the latest month for which government data is available.