The discount on Canadian heavy crude narrowed versus U.S. benchmark West Texas Intermediate (WTI) crude on Tuesday, as fears of a lengthy Keystone oil pipeline outage eased.
Western Canada Select (WCS) heavy blend crude for December delivery in Hardisty, Alberta, was trading at $21.90 per barrel below WTI, according to Net Energy Exchange, narrower than Monday’s settle of $22.30.
Worries about the possible duration of the Keystone pipeline outage abated, as available storage capacity in Alberta and a recent pickup in crude by rail shipments made a potential 10-12 day outage appear manageable, said Matt Murphy, an analyst at Tudor Pickering Holt & Co.
The Canadian province of Alberta said on Thursday it would allow companies to produce additional oil in December if they move it by rail.
Alberta is expected to announce soon its divestment to the private sector of crude by rail leases it holds worth 120,000 barrels per day.
Light synthetic crude from the oil sands did not trade as of Tuesday afternoon.
Global oil prices rose more than 1% on hopes for a U.S.-China trade agreement and optimism that Washington could roll back some tariffs on Chinese imports.