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Heavy crude differential widens after part of Keystone line shuts

The Canadian heavy oil differential widened modestly against the West Texas Intermediate (WTI) benchmark on Thursday, after a portion of the critical Keystone pipeline shut down due to a potential leak:

* Western Canada Select (WCS) heavy blend crude for March delivery in Hardisty, Alberta, was trading at $9.90 a barrel below WTI crude futures after word of the shutdown spread, wider than earlier trades at $9.40. The spread had settled at $10 below WTI on Wednesday, according to Net Energy Exchange.

* A portion of TransCanada Corp’s Keystone oil pipeline remained shut on Thursday for investigation of a possible leak on its right-of-way near St. Louis, Missouri.

* The 590,000 barrels-per-day Keystone pipeline is a critical artery taking Canadian crude from northern Alberta to U.S. refineries.

* Traders said the heavy differential widened modestly as shippers and buyers took note of the outage but they awaited further details before making more dramatic moves.

* Light synthetic crude from the oil sands for March delivery traded at 40 cents under WTI, compared with Wednesday’s settle of 10 cents over WTI.

* Global oil prices fell on Thursday after data showing a rise in U.S. inventories weighed on sentiment already rattled by the global economy.

(Reporting by Rod Nickel in Winnipeg, Manitoba; editing by Diane Craft)


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