Canadian heavy crude’s discount widened slightly versus the U.S. benchmark West Texas Intermediate (WTI) oil on Friday, as storage levels filled and OPEC and its allies debated coordinated production cuts to stem the market rout caused by the coronavirus pandemic.
Western Canada Select (WCS) heavy blend crude for May delivery in Hardisty, Alberta, traded at $16.25 per barrel below WTI, according to NE2 Canada Inc, wider than Thursday’s settle of $16 under.
OPEC and allies are working on a deal for an unprecedented production cut equivalent to around 10% of global supply, an OPEC source said.
“We expect heavy differentials to WTI to remain wide as storage fills up across North America,” said Stephanie Kainz, senior associate at RS Energy Group.
At this week’s levels, the differential results in a price realization of under $9 for WCS and around $7.50 for bitumen, according to analysts at Tudor, Pickering, Holt & Co.
Global oil prices surged for a second day, with benchmark Brent up 10% on hopes that a global deal to cut crude supply worldwide will emerge early next week.
Athabasca Oil Corp on Thursday halted its steam-driven Hangingstone project, pushing total shut-in Alberta production to 135,000 barrels per day, TD Securities said.
The western Canadian province is open to joining any potential global pact to reduce a glut of crude production, Premier Jason Kenney told Reuters on Thursday.