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Heavy discount widens to near 11-month high

November 6, 2019 2:08 PM
Reuters

The discount on Canadian heavy crude widened versus U.S. benchmark West Texas Intermediate (WTI) crude on Wednesday, as traders continued to factor in oil transportation constraints after the Keystone pipeline’s shutdown.

Western Canada Select (WCS) heavy blend crude for December delivery in Hardisty, Alberta, was trading at $22.35 per barrel below WTI, according to Net Energy Exchange, wider than Tuesday’s settle of $21.90.

The intraday price approached the 11-month high of $22.40 that was touched a day earlier.

Light synthetic crude from the oil sands traded at $2 below WTI, narrower than Tuesday’s settle of $2.35 under.

Spreads have leveled out despite the shutdown since last week of the Keystone oil pipeline. Shippers and marketers have found other avenues to move crude from Alberta on other pipelines or rail for the time being, a Calgary industry source said.

Pipeline operator TC Energy Corp has declared force majeure after a spill in North Dakota forced its Keystone oil pipeline to shut down.

The Canadian province of Alberta said last week it would allow companies to produce additional oil in December if they move it by rail.

Global oil prices fell after a much larger-than-expected build in U.S. crude inventories and after Reuters reported that the signing of a U.S.-China trade deal could be delayed until December.

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