The discount on Canadian heavy crude continued to narrow versus U.S. benchmark West Texas Intermediate (WTI) crude on Wednesday, after the Keystone pipeline returned to service on Sunday and eased bottlenecks.
Western Canada Select (WCS) heavy blend crude for December delivery in Hardisty, Alberta, was trading at $17.85 per barrel below WTI, according to Net Energy Exchange, narrower than Tuesday’s settle of $18.75 below.
The availability of spot market space on smaller pipelines was increasing demand for barrels, an industry source said.
TC Energy Corp told a majority of Keystone oil pipeline shippers that November volumes would be cut by nearly 39% after a leak in North Dakota spilled more than 9,000 barrels about two weeks ago, sources familiar with the matter said Wednesday.
Light synthetic crude from the oil sands traded at $2.15 below WTI, a larger discount than Tuesday’s settle of $1.55 under.
Oil prices edged up after the Organization of the Petroleum Exporting Countries said it saw no signs of global recession and rival U.S. shale oil production could grow by much less than expected in 2020.
The Canadian province of Alberta has in recent weeks loosened rules on mandatory oil curtailment by allowing production above set levels if it moves by rail, and by exempting new conventional wells from the restrictions.
Imperial Oil Ltd said on Tuesday that it was ramping up its current crude by rail movement due to improving economics.