Canadian heavy crude’s discount narrowed versus the U.S. benchmark West Texas Intermediate (WTI) on Wednesday, as recent curtailments kept supplies tight and producers were slow to restore production.
“It appears we’re in a bit of a cautious restart mode at present,” said Tudor Pickering Holt & Co analyst Matt Murphy, noting that production facilities Kearl and Syncrude are in turnaround.
Western Canada Select (WCS) heavy blend crude for July delivery in Hardisty, Alberta, traded at $8.60 per barrel below WTI, according to NE2 Canada Inc, narrower than Tuesday’s settle of $9 under.
Light synthetic crude from the oil sands was trading at $2.75 under, after Tuesday’s settle of $3 under.
A crash in global oil prices in March and April led to curtailments around the world, including an estimated 1 million barrels per day in Alberta. Prices have since improved.
Global oil prices recovered their earlier losses even as U.S. data showed crude inventories rose to a record high, reviving worries of a persistent glut due to weak demand.