Canadian heavy crude’s discount versus U.S. benchmark West Texas Intermediate (WTI) crude narrowed on Tuesday to the smallest discount since November, as bloated supplies diminished.
Western Canada Select (WCS) heavy blend crude for March delivery in Hardisty, Alberta, was trading at $18.25 per barrel below WTI, according to NE2 Canada Inc, narrower than Monday’s settle of $19.65 under.
Heavy crude traded for a discount as little as $18, the smallest since Nov. 19.
Alberta crude inventories dropped 14% in January from December, Eight Capital Research said in a note citing Imperial Oil .
Some 200,000 barrels per day (bpd) of crude capacity may be offline in the second quarter due to oil sands turnarounds, and an additional 180,000 bpd of pipeline capacity is being added in the first half, analysts at Peters & Co said.
Light synthetic crude from the oil sands traded at $4.60 below WTI, after settling on Monday at $4.50 under WTI.
Oil prices edged lower as fears that energy demand would take a long-term hit from the coronavirus outbreak offset prospects for more cuts in crude production from OPEC and its allies.
Canada’s Federal Court of Appeal on Tuesday dismissed a challenge to the approval by Prime Minister Justin Trudeau’s government of the Trans Mountain oil pipeline expansion, clearing some uncertainty from the project.
The proposed Enbridge Inc Line 3 pipeline replacement cleared a key hurdle on Monday with a Minnesota regulator.