The 622,000 b/d Keystone pipeline running from Alberta, Canada into the US Midwest has been halted for almost a week already after a 14,000-barrel oil spill in Kansas. 
Market differentials of Canada’s heavy Western Canadian Select have fallen some $5 per barrel since the outage, currently trading at a -$30/barrel discount to WTI as the off-take pressure grows on Canadian producers. The Keystone pipeline has leaked almost 26,000 barrels of oil since 2010, the most of any other pipeline in the given period. Keystone’s extension into the Marketlink pipeline system towards Texas has allowed Canadian producers of heavy crude to export their barrels from Gulf Coast terminals, with outflows reaching some 300,000 b/d recently, up until the oil spill. 

The US consumer price index increased by 7.1% year-on-year in November, a better-than-expected result that breathed some life into the market. Yet even with Brent testing the $80 per barrel threshold, news of China postponing its closed-door Central Economic Conference (where some had expected an announcement regarding the easing of its Covid policy) and of clinics swamped by long queues of people exhibiting coronavirus symptoms doesn’t bode well for a quick demand recovery.

Investors still flee oil futures. For the fourth consecutive week, investors have been reducing their positions in key oil futures and options contracts, selling the equivalent of 30 million barrels in the week ending December 6, bringing the total sell-off tally to 221 million barrels over the four past weeks.