Suncor cuts production outlook, narrowing heavy crude discount
Canadian heavy crude’s discount versus West Texas Intermediate (WTI) tightened this week to the narrowest level since mid-July, after major producer Suncor Energy reduced its full-year production guidance, tightening supplies.
Western Canada Select (WCS) heavy blend crude for October delivery in Hardisty, Alberta, traded at $7.60 per barrel below WTI, according to NE2 Canada Inc. It settled on Friday at $8.70 under.
Production outages and oil sands maintenance are limiting supplies and keeping the differential narrow, said Martin King, senior analyst at RBN Energy. He added that there may be little to no apportionment for the Enbridge Mainline into the autumn.
Suncor said on Sunday it has reduced its 2020 production guidance by 9% after the August fire at its Base Mine.
Imperial Oil Ltd last week shut all production at its 220,000-barrel-per-day (bpd) Kearl oil sands site in Canada due to an outage of part of the Polaris pipeline in Alberta following a spill.
Light synthetic oil from the oil sands for October delivery traded at $1.85 below WTI, narrower than Friday’s settle of $2.20.
Global oil prices tumbled after Saudi Arabia cut its October selling prices and as many countries saw a flare-up in coronavirus cases.