Heavy discount widens amid talk of Saudi-Russia production cut

Canadian heavy crude’s discount widened modestly versus the U.S. benchmark West Texas Intermediate (WTI) oil on Thursday, as global prices soared on U.S. talk of Russia and Saudi Arabia making a major production cut.

Western Canada Select (WCS) heavy blend crude for May delivery in Hardisty, Alberta, traded at $16 per barrel below WTI, according to NE2 Canada Inc, wider than Wednesday’s settle of $15.75 under.

Global oil prices soared as U.S. President Donald Trump said he had spoken to Saudi Crown Prince Mohammed bin Salman, and expects Saudi Arabia and Russia to cut oil output.

The WCS-WTI differential is likely to remain in the current range unless Alberta expands curtailment, a Calgary-based trader said.

The widening WCS differential had pushed the Canadian absolute price to half the cost of shipping by pipeline to the U.S. Gulf Coast, TD Securities said in a note this week.

Canada’s total crude oil exports rose in December by 810,000 barrels per day to 4.14 million, Statistics Canada reported.