LST natural gasoline affected by Alberta fires

OREANDA-NEWS. June 03, 2015. Trading for LST natural gasoline at Mont Belvieu, Texas, has thinned this week after three Alberta oil sands producers shut down operations last week because of forest fires.

The production shutdowns have significantly impacted diluent demand in Alberta, market sources have told Argus. Weaker Canadian diluent demand has spilled into the US markets and is starkly noticeable in natural gasoline's price at the LST terminal in Mont Belvieu, which ships product north to Canada.

Since the fires' outbreak, LST natural gasoline's price has fallen from a 2?/USG discount to EPC natural gasoline on Friday, to a 0.25? premium yesterday, after the new trading month began in Canada.

Today LST natural gasoline was talked at a 1.125-2 discount to EPC, though no trades were heard done.

Condensate in Edmonton, Alberta, is trading weaker as well, pegged at a cash price of 134.7/USG today, almost at parity with Gulf coast natural gasoline before adding in the pipeline transportation costs. The combined transportation cost to ship north on the Explorer and Southern Lights pipelines is estimated at 19–23.8?/USG.

Edmonton condensate's weaker price has closed the Mont Belvieu-to-Alberta arbitrage, even with LST natural gasoline priced at a discount to EPC, at 126.875/USG today.

It is unclear how long the production shutdowns will last, though facility assessments have begun, market participants have said. The government of Alberta issued an update at 12pm ET today saying 25 of 36 fires are under control.

Edmonton condensate was heard traded at a \\$5.25/bl to \\$4.75/bl discount to July calendar-month average (CMA) WTI today. The market's value fell by \\$2.35/bl from Friday to Monday as the July trading cycle began.

EPC natural gasoline price has been unaffected by the dip in Canadian demand, firming on Monday and Tuesday this week.