Canadian heavy crude’s discount versus U.S. benchmark West Texas Intermediate (WTI) crude widened on Thursday, but remained near its narrowest level in 2-1/2 months.
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, wider than Wednesday’s settle of $17.70 under.
The spread was as little as $17 earlier, the smallest since mid-November.
Increased rail volumes and modest additional pipeline capacity is helping clear inventories, said Matt Murphy, analyst at Tudor Pickering Holt & Co.
Light synthetic crude from the oil sands traded at $3.60 below WTI, after settling on Wednesday at $4 under WTI.
Global oil prices gave up early gains and settled narrowly mixed, as OPEC and its partner Russia gave mixed signals about possible further output cuts to mitigate the impact of any weakening in global demand due to the coronavirus outbreak.
Suncor Energy on Wednesday guided to 145,000 barrels per day of oil capacity offline for turnarounds in the second quarter, similar to a year ago, and suggests price differentials will tighten significantly, Peters & Co said in a note.