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by Stockwatch Business Reporter

West Texas Intermediate crude for October delivery added 50 cents to $46.75 on the New York Merc, while Brent for October added 18 cents to $50.68 (all figures in this para U.S.). Western Canadian Select traded at a discount of $14.10 to WTI ($32.65), unchanged. Natural gas for October added 7.7 cents to $2.725. The TSX energy index lost a fraction to close at 172.74.

Canadian Oil Sands Ltd. (COS) lost 32 cents to $6.46 on 5.48 million shares. It has warned that its production will be on the low end of its target range as a result of a fire that damaged equipment at its 36.7-per-cent-owned Syncrude project last Saturday, forcing production to be suspended. The fire was put out quickly, with no injuries or environmental damage reported, said Canadian Oil Sands on Sunday. It added last night that the operator plans to complete a phased recovery over the coming weeks and return to normal production by the end of the month. Although this will affect third quarter production, Canadian Oil Sands still expects to be within its full-year guidance of 97,000 to 108,000 net barrels a day, even if just barely. CIBC analyst Arthur Grayfer had worried earlier this week that the fire might lead to a guidance miss or reduction, particularly because production was already affected in April and May by scheduled maintenance. Now he figures that the company will just squeak in. He wrote this morning that he is forecasting third quarter production of 87,400 net barrels a day, down from his previous prediction of 111,800. His full-year production estimate has gone down to 97,100 barrels a day from 103,300. Even though his full-year prediction is within the company's guidance, he still seems concerned about a possible miss, cautioning his readers that "reliability issues at Syncrude continue to be a concern for us." "Reliability issues" is presumably his way of mentioning that Syncrude's guidance had to be lowered four times in 2014 and three times in 2013 because of operational mishaps. It is not clear what kind of mishap led to Saturday's fire; Canadian Oil Sands says it is still investigating.

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