Canadian heavy crude’s discount widened versus the U.S. benchmark West Texas Intermediate (WTI) oil on Monday, as top producers Saudi Arabia and Russia delayed discussions aimed at reducing global oversupply and crude production in Alberta tested storage limits.
Western Canada Select (WCS) heavy blend crude for May delivery in Hardisty, Alberta, traded at $17.80 per barrel below WTI, according to NE2 Canada Inc, wider than Friday’s settle of $16.80 under.
“The biggest driver (for the differential) is the concern over Alberta oil storage filling to operational limits,” said Martin King at RBN Energy.
Global oil prices fell 3.6% after Saudi Arabia and Russia delayed a meeting to discuss output cuts that could help to reduce global oversupply as the coronavirus pandemic pummels demand. O/R
City-wide lockdowns in North America and global travel restrictions are increasingly hurting refinery margins, and, in turn, appetite for Western Canada’s heavy oil, Bank of Nova Scotia analysts said.
Canada’s Enbridge Inc is running North America’s biggest oil pipeline network with unused capacity, a company executive told Reuters on Monday.
U.S. President Donald Trump said on Sunday he could slap “very substantial tariffs” on oil imports if prices stay low.