TC Energy Says The Keystone Pipeline Will Reduce Volume

TC Energy (NYSE:TRP) of Canada reported on Tuesday that its Keystone oil pipeline with a capacity of 622,000 barrels per day will limit output due to recent severe weather-related disruptions on system facilities.

Monday was the day that the Calgary-based corporation informed consumers of the force majeure situation. Citing customer confidentiality, TC did not reveal the extent or duration of the service cut.

"The notices informed customers that the Keystone System will be obliged to restrict volumes commencing on November 15 due to the time the system was halted during the force majeure incident," TC said in a statement.

Two market sources reported a 7% volume decrease. According to one of the sources, the price of Canadian heavy crude dipped on Monday and then recovered on Tuesday.

According to NE2 Inc, Western Canada Select heavy blend crude for December delivery closed $28.60 per barrel below U.S. crude futures, after trading at $28.85 per barrel the previous day.

Keystone is an essential part of Canada's oil export network, delivering crude oil from Alberta to the United States. Midwest followed by Gulf Coast.

In order to test the system, TC stated in October that it would temporarily increase the capacity of its Keystone pipeline for a few months beginning in November.