Western Canada Select (WCS) heavy blend crude for April delivery in Hardisty, Alberta, was trading at $13.15 per barrel below WTI, according to NE2 Canada Inc, narrower than Monday’s settle of $13.50 under.
The differential was as little as $10.50 on Monday, the smallest since Aug. 21, 2019.
U.S. Gulf Coast refiners are active buyers of Canadian heavy crude, with supplies limited from countries such as Venezuela, a Calgary-based industry source said. The heavy differential is so narrow, however, that shippers have little incentive to move oil by rail from Alberta, the source said.
Cenovus Energy announced a 32% cut to its capital spending for the year and a temporary suspension of its crude-by-rail program amid an erupting Saudi-Russia oil price war.
Light synthetic crude from the oil sands traded at $1.70 over WTI, narrower than Monday’s settle of $3 over.
Global oil prices jumped over 8%, bouncing from the biggest rout in nearly 30 years, as the possibility of economic stimulus encouraged buying and U.S. producers slashed spending in a move that could cut output.