Canadian heavy crude’s discount versus U.S. benchmark West Texas Intermediate (WTI) crude widened on Wednesday as protests slowed the country’s rail shipments.
Western Canada Select (WCS) heavy blend crude for March delivery in Hardisty, Alberta, was trading at $16.85 per barrel below WTI, according to NE2 Canada Inc, wider than Tuesday’s settle of $16 under.
Protests related to the Coastal GasLink pipeline continued for a sixth day.
Oil producer Cenovus Energy said the blockades could jeopardize rail shipments.
Canadian National Railway Co , the country’s biggest railroad, said on Tuesday it would be forced to shut down parts of its network unless rail line blockades are removed.
The heavy differential was still at relatively narrow levels and reflects oil storage drawing down in Western Canada after a buildup caused by an outage late last year on the Keystone XL pipeline, analysts at Raymond James said in a note.
The market is also eyeing second-quarter downtime for maintenance at oil production sites, a Calgary industry source said.
The heavy differential’s lowest price a day earlier, $15.65, represented the narrowest WCS-WTI differential since mid-November.
Light synthetic crude from the oil sands was trading at $2.75 below WTI, wider than Tuesday’s settle of $2.50 under.
Global oil prices rose over 3% as China reported its lowest daily number of new coronavirus cases since late January, stoking investor hopes that fuel demand in the world’s second-largest oil consumer may begin to recover.