Western Canada Select (WCS) heavy blend crude for May delivery in Hardisty, Alberta, settled at $16.15 a barrel below the WTI benchmark crude price, according to Shorcan Energy brokers, compared with Tuesday’s settle of $17.90.
The move may be caused by pipeline operator Enbridge Inc freeing up space for heavy producers on primarily light dedicated lines, as a number of light barrels are offline for turnarounds, said analysts at Tudor, Pickering, Holt and Co in a note.
Some producers have slowed output over the steep heavy oil discount.
The heavy discount is expected to persist for the foreseeable future, as rising production in Alberta’s oil sands outstrips pipeline and rail shipping capacity.
An expected return of TransCanada Corp’s Keystone pipeline to full pressure, following a November leak, would help reduce the discount, traders have said.
Light synthetic crude from the oil sands for May delivery settled at $1.70 over WTI, a larger premium than Tuesday’s settle of $1.25.