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Heavy discount narrows on demand uptick, reduced Syncrude output

December 5, 2019 1:20 PM
Reuters

The discount on Canadian heavy crude narrowed versus U.S. benchmark West Texas Intermediate (WTI) crude on Thursday, due to stronger demand and reduced production from the Syncrude oil sands site.

The slight narrowing reflected some buyers being short and favorable arbitrage opportunities, a trader said.

Western Canada Select (WCS) heavy blend crude for January delivery in Hardisty, Alberta, was trading at $19.95 per barrel below WTI, according to NE2 Canada Inc, compared with Wednesday’s settle of $20.40 below.

Light synthetic crude from the oil sands traded 15 cents over WTI, compared with Wednesday’s settle of 25 cents over.

Canada’s Syncrude oil sands facility reduced December production by 1.6 million barrels because of operational problems, sources told Reuters.

Western Canadian oil stocks climbed to a record high 39 million barrels as of Nov. 29 due to a temporary outage of the Keystone oil pipeline and a strike by Canadian National Railway Co workers, data provider Genscape said.

Oil futures were little changed, supported by expectations that OPEC will deepen output curbs but pressured by the prospect that gas condensate will be excluded from cuts for non-member producers.

Canada crude oil exports to the United States rose 230,000 barrels per day (bpd) to 3.8 million bpd in October: Statistics Canada.

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