The discount on Canadian heavy crude widened to a nearly one-month high versus U.S. benchmark West Texas Intermediate (WTI) crude on Tuesday due to high inventory levels.
Western Canada Select (WCS) heavy blend crude for January delivery in Hardisty, Alberta, was trading at $22.40 per barrel below WTI, according to NE2 Canada Inc, compared with Monday’s settle of $21 below.
The heavy differential reached its widest level for the benchmark month since Nov. 6.
The wider differential was factoring in crude storage buildups due to last month’s Keystone pipeline outage and Canadian railway strike, as well as seasonal increases due to maintenance at U.S. refiners, a Calgary industry source said.
Light synthetic crude from the oil sands traded at 50 cents below WTI, compared with Monday’s settle of even.
At least 800 workers at the Co-op Refinery in Regina, Saskatchewan, have voted in favor of striking.
Commercial service on the Canadian portion of Enbridge Inc’s Line 3 pipeline replacement, which carries light oil, began on Sunday. Line 3 and other pipeline improvements will combine to move an incremental 100,000 barrels per day by year-end, an Enbridge spokeswoman said.
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 steadied, as expectations of output cuts from OPEC and allied producers brought prices back up after they slid briefly following comments from U.S. President Donald Trump that a trade deal with China may be delayed.