Keystone pipeline in the United States on Wednesday could squeeze crude inventories at the country’s primary storage hub and in two main refining regions, the Midwest and Gulf Coast, analysts and traders said on Friday.
Canadian crude prices have already slumped on the news, widening on Thursday to a discount of roughly $33 per barrel to benchmark West Texas Intermediate crude futures – which is currently trading at about $72 a barrel – from about $27 on Wednesday. The line runs directly to the Cushing, Oklahoma, storage hub and delivery point for WTI, which is currently about 31% full with nearly 24 million barrels in stock. If the line is closed for more than a week, it could reduce Cushing stocks by about 2.5 million barrels, data analytics firm Wood Mackenzie said.The spill in Kansas took place downstream from a key junction in Steele City, Nebraska, where Keystone splits to run into Illinois.