Wildfires boost Canadian crude prices as Suncor cuts production from Firebag oil sands site

Robert Tuttle, Bloomberg July 07, 2024

(Bloomberg) – Canadian heavy crude prices strengthened for a second day after Suncor Energy Inc. curtailed production at its Firebag oil sands site due to a nearby wildfire.

Source: Suncor

Western Canadian Select’s discount to the West Texas Intermediate benchmark narrowed to $13.65 a barrel from $14.70 on Thursday, according to General Index data posted on Bloomberg and a person familiar with prices.

Suncor said late Thursday that it’s temporarily curtailing some production at Firebag because of a nearby wildfire. The blaze is about 8 km (5 miles) from the site and grew to about 12,000 hectares (29,650 acres) in size since Thursday.

While the blaze showed “no significant” growth toward infrastructure, it did grow toward the east and showed “extreme fire behaviour,” Alberta Wildfire said in an update.

“Today will be another challenging day for firefighters,” the department said.

Firebag produced 231,000 bpd of crude in May, Alberta Energy Regulator data show. In addition to Firebag, the wildfire is within about 25 km of two other major oil sands sites: Imperial Oil Ltd.’s Kearl mine and Cenovus Energy Inc.’s Sunrise well site. Both companies said Thursday that production hasn’t been affected.

Connect with World Oil
Connect with World Oil, the upstream industry's most trusted source of forecast data, industry trends, and insights into operational and technological advances.