The discount on Canadian heavy crude widened versus U.S. benchmark West Texas Intermediate (WTI) crude on Wednesday, sliding to near the weakest level in a year as stockpiles hit record levels.
Western Canada Select (WCS) heavy blend crude for January delivery in Hardisty, Alberta, settled at $22.25 per barrel below WTI, according to NE2 Canada Inc, near the widest level since early December 2018. WCS settled at $20.40 below futures on Tuesday.
Light synthetic crude from the oil sands ended the session $2.85 below WTI, compared with Tuesday’s settle of $1.90 below.
Western Canadian oil stocks have 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.
“The ripple effect of the recent Keystone oil spill continues to plague WCS prices given that inventories have been elevated to record levels. This serves as yet another reminder of how egress challenged the market is,” said Michael Tran, managing director of energy strategy at RBC Capital Markets in New York.
Benchmark oil prices dropped almost 1% on Wednesday following a surprise build in U.S. crude inventories, and as investors waited to see if a fresh round of tariffs by Washington on Chinese goods would come into force on Sunday.
