Oil was trading higher Friday morning driven, in part, by TransCanada Corp's (TSX, NYSE:TRP) announcement yesterday that it was temporarily shutting down its existing Keystone pipeline after tests showed possible safety issues.
The Calgary-based company's pipeline, which moves on average about 500,000 barrels of crude a day from Alberta down through several states to facilities Illinois and Oklahoma, will be out of commission at least until the end of Friday.
Jeannie Layson, spokeswoman for the Pipeline and Hazardous Materials Safety Administration, which oversees pipelines in the U.S., told Canadian Press on Thursday that no leaks were detected on the line.
Canada exports 2 million barrels of oil per day to the U.S. and almost all of it ends up at Cushing, Texas, , the pricing point for U.S. crude, which refining capacity is limited.
Alberta production is set to more than double to 3.7 million barrels by 2025 out of a total of 4.7 million. Production in the US particularly from the Bakken basin in North Dakota will see the country ramp up current output of 7.8 million barrels to 10.9 million barrels over the next few years.