Blazes threaten more than 400,000 barrels a day of oil production
Hot and dry weather is spawning dozens of new wildfires across Alberta, with blazes threatening more than 400,000 barrels a day of Canada’s oil production.
Wildfires in Alberta this year have reduced production from the oilsands — the world’s third-largest crude reserves — and forced a partial evacuation of Fort McMurray in May. A new bout of hot weather has inflamed fire activity in recent weeks, with more than 50 out-of-control blazes burning in the province currently.
The fires helped boost Canadian heavy crude prices. Western Canadian Select’s discount to benchmark West Texas Intermediate narrowed to US$13.10 a barrel on Wednesday from US$14 a barrel on Tuesday, according to a person familiar with prices.
Temperatures as high as 32C Wednesday, low relative humidity and winds gusting up to 30 kilometres an hour in northeastern Alberta may contribute to “extreme fire behaviour” lasting for the next few days, Alberta Wildfire said in an update.
The fire affecting Suncor, Cenovus and Imperial has moved closer to the production sites in recent days, as has an out-of-control wildfire about 9 kilometres to the south. Fires southwest of Fort McMurray have also affected production. Greenfire Resources Ltd. last weekend temporarily curtailed output from its Hangingstone sites, which produces about 23,000 barrels a day.