The discount on Canadian heavy crude was unchanged versus U.S. benchmark West Texas Intermediate (WTI) crude on Tuesday, but remained large due to large stockpiles and limited pipeline space.
Alberta oil storage levels are high after a temporary Keystone pipeline outage last year and with production steady, a Calgary industry source told Reuters. The heavy differential may narrow in the second quarter when oil producers conduct maintenance, the source said.
Western Canada Select (WCS) heavy blend crude for February delivery in Hardisty, Alta., traded at $22.50 per barrel below WTI, according to NE2 Canada Inc. It was unchanged from Monday’s settle.
The heavy differential last week touched $23.40 below WTI, the biggest discount since early December 2018.
Light synthetic crude from the oil sands traded $2.85 below WTI, wider than Monday’s settle of $2.75 below.
Egress from Western Canada is improving with 100,000 barrels per day (bpd) added on Enbridge Inc’s Mainline in the fourth quarter and 50,000 bpd being added to TC Energy’s Keystone line in the current first quarter, Eight Capital analyst Phil Skolnick said in a note.
Canadian crude oil exports fell 500,000 bpd to 3.33 million bpd in November, according to Statistics Canada.
Global oil prices fell almost one per cent as investors reconsidered the likelihood of immediate supply disruptions in the Middle East.
(Reuters)
