Alberta Pipeline Disrupted as Fire Season Starts in Oil Patch

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(Bloomberg) -- Wildfire season in Alberta began with a blaze that cut power to a key pipeline in the oil sands, causing heavy crude prices to surge.

Inter Pipeline Ltd. is in the process of restoring service to parts of its Polaris Pipeline system after power was cut to the line’s Lamont Station on Sunday, the company said Tuesday. The line, which carried 194,000 barrels a day last year, supplies light oil from the Edmonton area to the Athabasca and Cold Lake areas of Alberta, where it’s used to diluted bitumen so that the heavy crude can flow freely through pipelines to refineries.

Following the disruption, heavy Western Canadian Select’s discount to West Texas Intermediate crude shrank $1.75 to $13.50 a barrel, the narrowest since October. The discount for Edmonton C5 condensate, a common form of diluent, widened 30 cents to $1.70 a barrel, the widest since January.

Wildfires are common in Alberta in the spring and summer months with a massive one in 2016 burning down whole sections of the town of Fort McMurray and causing the shutdown of more than a million barrels a day of oil sands production.

Osum Oil Sands Corp. said its operations weren’t affected by the disruption to Polaris and Cenovus Energy Inc. said business was normal. Canadian Natural Resources Ltd. declined to comment. Suncor Energy Inc. and Imperial Oil Ltd. didn’t immediately return an email for comment.

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