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Here experts State Gasoline Rates, oil could be impacted by the Keystone oil spill

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Here experts State Gasoline Rates, oil could be impacted by the Keystone oil spill

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On Thursday, an estimated 9,120 barrels of oil spilled from TC Energy Corp.’s Keystone’s primitive pipeline near Edinburgh, North Dakota.Early estimates suggest 1.4 million litres of oil have spilled, affecting 2,090 square meters of land.

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Keystone pipeline leaks over 1.4M litres of oil in North Dakota

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The business said there were no injuries and it had been investigating the reason for the breach.The pipeline was shut down because the leak.In addition to raising environmental concerns, the spill has prompted concerns of how, and when, it is going to influence the Canadian oil industry. Will oil prices be impacted and will notice an increase in gas prices?



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Here’s what experts say:Patrick DeHaan, head of patroleum investigation at GasBuddy, says while the quantity of oil lost is a”drop in the bucket” compared to how much oil the pipeline transports, by a spill perspective, the incident is”fairly important,” along with the consequences are”rather notable. It’s a component of a 4,324-kilometre system that is also to incorporate the 8 billion Keystone XL pipeline, made to transfer the oil from western Canada to terminals on the Gulf Coast. “The simple fact that the pipeline has closed down today as a result of this spill, it sounds like there can be downtime of several days, or even longer, where this possibly influenced portion of this pipeline where this breach happened,” DeHaan said. “And certainly because this pipeline carries Canadian crude oil down into the Unites States to refineries in the Midwest, this might start to lead to some little backup in oil distribution in Canada which may negatively influence the purchase price of Canadian oil. “TC Energy has not said when pipeline operations would resume, but told shippers that support to U.S. Midwest refiners would stay closed during the outage. The line could stay closed for at least a week, based on market sources.

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DeHaan says the longer the pipeline is closed, the bigger the issue could become. “I’d say in a matter of over five times, seven times it might start to become important, so it would happen in rather short order,” he said. “And also a pipeline breach of this size — that calls into question the line’s integrity, so it could take longer than that. “So I think we’re right on the cusp of having a bigger backup difficulty in Canada at this point.”

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He said there is a high demand for what’s known as distillates such as jet fuel, heating oil and gas as we go into the winter months.He says refiners are”trying to shake up the refineries to get ready for winter,” increasing the demand for this type of crude oil. “So it depends how long it takes for them to correct this and how the stock exchange actually reacts to this news.”

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He says if dealers considering the futures market think this is going to be a major supply disruption, then it might lead to a little spike in the purchase price of crude, gas and diesel.However, he says the pipeline would have to stay shut for longer than two weeks for there for a sizable impact.McKnight says he doesn’t think that will happen because officials are going to want to wash the spill and repair the pipeline as quickly as possible”because it is in their best interest” to do so. “I can not see this lasting. This isn’t a major, major earth-shattering spill or leak,” he said. “It’s a minor one in terms of spill amounts. He says because the majority of the oil doesn’t end up back in Canada, that is. “But even then, until this particular pipeline is down for a time period, that will amount to over a week. I would not say there would be widespread consequences as a result of its shutdown,” he said. “But then, there will probably be more of a pricing impact in the U.S. since the breach at the pipeline severed the link from Canadian oil fields to U.S. refineries. “DeHaan says it is probably the spill will not have any impact, or will have”very limited impact” on gasoline prices in Canada. “I would not expect that many drivers would feel really any impact from this,” he said.He added, however, that some parts of Western Ontario, such as Sarnia, could see a”very little” impact because refiners at the Great Lakes serve those areas. However, he says when the pipeline remains shut for an extended time period, Canadians may start to see”minor impacts” in the pump.

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McKnight says the spill will not have some major affects on gasoline rates. — With files from The Associated Press and Reuters


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