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As analysts forecast that the Canadian oil sands industry could lose over US$760 million as a result of the wildfires that continue to ravage Alberta, reports emerge that oil sands producer Suncor has purchased a shipment of North Sea crude, leading to speculation of a shortage in Canada.
On Wednesday, Canadian analysts from the Conference Board of Canada said the loss from the wildfires amounted to 14 million barrels of oil, which they put a US$763-million price tag on, due to wildfire damage, evacuations and shutdowns.
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More specifically, the wildfires have cost the industry 1.2 million barrels per day over a period of two weeks, or 0.33 percent of Alberta’s 2016 GDP forecast, according to the Globe and Mail.
According to the BBC, some facilities that have earlier resumed production have had to halt again.
A chart sourced from the Alberta provincial government and published by the Globe and Mail painted a dire picture of shutdowns.
(Click to enlarge)
The analysts also suggested that the knock-on effect would be that refineries processing Canadian oil sands will likely have to seek alternative supplies for the time being.
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Canadian Suncor Energy may be the first. According to a Reuters report, the company has purchased a “rare” cargo of North Sea crude, prompting speculation that it needs alternative sources to feed its refinery.
Reuters data showed that Suncor—one of the two largest operators in Alberta’s oil sands patch—has purchased 1 million barrels of North Sea Ekofisk Blend crude, which will load later this week in Northern England and make its way to Portland, Oregon, where the Portland-Maine pipeline transports crude to Suncor’s Montreal refinery.
By Charles Kennedy of Oilprice.com
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Charles is a writer for Oilprice.com