WCS surges thanks to ENB's news and new rules Canadian crude makes record jump after Enbridge scraps new rules
Jun. 4, 2018 7:15 PM ET|About: Enbridge Inc. (ENB)| By: Carl Surran, SA News Editor
Western Canadian Select crude oil surged as much as $12.20/bbl to $13.80 below the U.S. benchmark today after Enbridge (NYSE:ENB) said it would not implement recently announced rules to stop shippers from claiming more space than they can use on its Mainline pipeline linking Alberta’s oil sands with U.S. refineries.
ENB last month told shippers that their volumes would be based on a 12-month rolling average plus 15% for heavy crude and 40% for light crude, and shippers who wanted to send more than their allotted amount would have been required to show physical proof of the volumes.
ENB's change of mind shows "the pipelines can’t just do changes that aren’t fair and are not conducive” to its customers, as "producers have a strong say in how the market is going to be participated in,” Tim Pickering, chief investment officer at Auspice Capital Advisors, tells Bloomberg.
Canadian crudes have weakened to historically low levels in recent weeks as growing production overwhelms available pipeline capacity to transport Alberta’s supplies south of the border.