Heavy crude discount narrows slightly after output cuts

The Canadian heavy oil differential narrowed slightly against the West Texas Intermediate (WTI) benchmark on Friday, following production cuts, but remained within range of historically wide levels as output surpasses transport capacity:

* Western Canada Select (WCS) heavy blend crude for December delivery in Hardisty, Alberta, was trading Friday afternoon at $44.20 a barrel below WTI crude futures , compared with Thursday’s settle of $45, according to Shorcan Energy brokers.

* Light synthetic crude from the oil sands for December delivery was trading at $30 under WTI, compared with Thursday’s settle of $33.

* In the short term, some relief on price differentials may come from producers’ curtailing production and an increase of rail volumes, said Elias Foscolos, analyst at IA Financial Group.

* Cenovus Energy , MEG Energy and Canadian Natural Resources Ltd all announced output cuts this week.

* Global crude futures fell 1 percent on Friday, heading for a weekly loss of over 6 percent, as investors worried about oversupply when the United States said it will temporarily spare eight jurisdictions from Iran-related sanctions.