Canadian heavy crude’s discount narrowed versus the U.S. benchmark West Texas Intermediate (WTI) crude on Tuesday, as demand remained strong from U.S. Gulf Coast refiners.
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.