Canadian heavy crude’s discount widened versus U.S. benchmark West Texas Intermediate (WTI) oil on Wednesday, the first day of the monthly trading cycle.
Western Canada Select (WCS) heavy blend crude for May delivery in Hardisty, Alberta, traded at $16.65 per barrel below WTI, according to NE2 Canada Inc, wider than Tuesday’s settle of $15 under.
With WTI prices trading around $21, the net Canadian heavy price was about $4 per barrel, around the lowest on record.
“Basically (it’s) signaling that more Canada production needs to be shut in,” a Calgary-based trader said, adding that the low price reflects lack of buying from refiners.
Consultancy Rystad Energy estimated last week that Western Canadian oil production will need to drop 11% or 440,000 barrels per day in April due to a global supply surplus.
Light synthetic crude from the oil sands was trading at $14.60 below WTI, around the widest level since December 2018, after Tuesday’s settle of $11 under.
Global oil prices fell after data showed U.S. crude inventories rose last week by the most since 2016 while gasoline demand suffered its biggest weekly drop ever due to the coronavirus pandemic.