Heavy crude discount narrows as cuts ease bottleneck
The Canadian heavy oil discountnarrowed against the West Texas Intermediate (WTI) benchmark onWednesday, as capacity cuts continued to ease the impact ofpipeline and rail bottlenecks.
* Western Canada Select (WCS) heavy blend crude for Maydelivery in Hardisty, Alberta, settled at $15.25 a barrel belowthe WTI benchmark crude price , according to ShorcanEnergy brokers, compared with Tuesday's settle of $15.45.
* The discount has narrowed in recent weeks as producerslike Canadian Natural Resources , faced with transportation issues and the wide differential, have slowedoutput of heavy crude, analysts and traders said.
* The federal government, Alberta and British Columbia arelocked in a political struggle over Kinder Morgan Canada's Trans Mountain pipeline expansion, which is supportedby Canadian producers. The company said on Sunday it would scrapthe project unless it had certainty by May 31.
* An expected return of TransCanada Corp's Keystonepipeline to full pressure, following a November leak, would helpreduce the discount, traders have said.
* Light synthetic crude from the oil sands for May deliverylast traded at $2.25 below WTI, in line with Tuesday's settle of$2.25.
(Reporting by Julie Gordon in Vancouver; Editing by PeterCooney)