PROCESSWEST Magazine Online

Crude discount narrows as U.S. benchmark nosedives

June 12, 2020   Don Horne




Canadian heavy crude’s discount narrowed versus West Texas Intermediate (WTI) on Thursday, as the U.S. benchmark plunged on virus-related demand concerns.

Deep oil curtailments in Western Canada, ahead of a gradual increase in refinery demand, has kept differentials narrower than usual, according to traders.

Scotiabank told Reuters it expects three-quarters of Western Canadian shut-in volumes to return through summer, while turnarounds are also completed. It estimates total shut-ins and turnarounds at 966,000 barrels per day.

Scotiabank expects Canadian price differentials to widen as shut-in volumes return, particularly affecting heavy oil prices.

Western Canada Select (WCS) heavy blend crude for July delivery in Hardisty, Alberta, traded at $8.50 per barrel below WTI, according to NE2 Canada Inc, narrower than Wednesday’s settle of $8.80 under.

Advertisment

Light synthetic crude from the oil sands was trading at $2.50 under, after Wednesday’s settle of $2.75 under.

Global oil prices tumbled 8%, fuelled by renewed concerns about demand destruction as new cases of coronavirus tick up globally, while crude inventories hit a record in the United States.

(Reuters)


Print this page

Related Stories

Leave a Reply

Your email address will not be published. Required fields are marked *

*