The discount on Canadian heavy crude widened slightly versus U.S. benchmark West Texas Intermediate (WTI) crude on Monday, the start of a new monthly trading cycle.
Western Canada Select (WCS) heavy blend crude for January delivery in Hardisty, Alberta, was trading at $20.90 per barrel below WTI, according to NE2 Canada Inc, compared with Friday’s settle of $20.75 below in thin trading.
The heavy differential remained wide amid large inventories following a Canadian railway strike that ended last week and with the Keystone pipeline still operating at reduced pressure, a Canadian trading source said.
Light synthetic crude from the oil sands traded even with WTI in thin volume, compared with Friday’s settle of $2.60 under.
Commercial service on the Canadian portion of Enbridge Inc’s Line 3 pipeline replacement, which carries light oil, began on Sunday and is moving an additional 100,000 barrels per day, Alberta Energy Minister Sonya Savage said in a statement.
Canadian oil and gas producer Husky Energy Inc said that it expected “real relief” from Alberta’s oil curtailments could come in the first quarter.
Oil futures gained about 1% on hints the Organization of the Petroleum Exporting Countries (OPEC) and its allies may agree to deepen output cuts at a meeting this week and as rising manufacturing activity in China suggested stronger demand.