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by Stockwatch Business Reporter
West Texas Intermediate crude for February delivery lost 56 cents to $78.90 on the New York Merc, while Brent for March lost 24 cents to $81.75 (all figures in this para U.S.). Western Canadian Select traded at a discount of $12.14 to WTI, down from a discount of $12.12. Natural gas for February added 11 cents to $3.92. The TSX energy index added 1.58 points to close at 177.35.
Canadian oil producers ended the week on a cheerful note: The reversed Capline pipeline is now fully in service. This opens up a new route for Canadian crude to get to refineries on the U.S. Gulf Coast. Initial volumes on the pipeline are 100,000 barrels a day, with room to double this capacity to 200,000 barrels a day (and perhaps even more later on).
The reversal of this pipeline has been a long time coming. Capline, owned by Plains All American and Marathon Petroleum, stretches over 1,000 kilometres from Patoka, Ill., to St. James, La. It was commissioned in 1968 and historically took crude from the Louisiana Gulf Coast to refineries in the Midwest. As Gulf Coast refineries began showing higher demand for heavier crude from Canada, Plains and Marathon began to consider reversing the Capline, which would be able to connect to Canada through a different pipeline system (Enbridge Inc.'s (ENB: $51.28) Mainline network and Southern Access extension) and take northern crude to the Gulf Coast. Those musings started as far back as 2012. Long-term contracts made the idea impossible until after 2016. In 2017, Plains and Marathon committed to the reversal, and now, roughly five years later, the reversed line is in service.
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