The Canadian heavy oil differential narrowed again against the West Texas Intermediate (WTI) benchmark on Monday, but remained within range of historically wide levels as output continues to surpass transport capacity:
* Western Canada Select (WCS) heavy blend crude for December delivery in Hardisty, Alberta, settled on Monday at $42 a barrel below WTI crude futures , compared with Friday's settle of $44.20, according to Shorcan Energy brokers.
* Light synthetic crude from the oil sands for December delivery settled at $29.50 under WTI, compared with Friday's settle of $30.50.
* The differential has compressed because the WTI price has narrowed from about $75 to about $63, with realized prices for Canadian barrels remaining largely unchanged, said Matt Murphy, an analyst with Tudor, Pickering, Holt & Co.
* Production cuts announced by a number of major producers last week are helping incrementally improve the supply-demand balance, but a balance has not yet been achieved, Murphy said.
* The discount on Western Canadian crudes has climbed to record levels this year as rising production has outstripped pipeline capacity and new crude by rail capacity has not yet reached volumes needed to clear the glut.
* Global oil prices were mixed on Monday after a steep five-day fall, as the United States formally imposed punitive sanctions on Iran but granted eight countries temporary waivers allowing them to keep buying oil from the Islamic Republic.
(Reporting by Julie Gordon in Vancouver Editing by Leslie Adler and Diane Craft)
