Canadian heavy crude’s discount widened versus West Texas Intermediate (WTI) on Wednesday while production levels remained in focus.
Western Canada Select (WCS) heavy blend crude for August delivery in Hardisty, Alberta, traded at $7.80 per barrel below WTI, according to NE2 Canada Inc, wider than Tuesday’s settle of $7.50 under.
Oil sands producers will respond to physical refinery demand, and not just price, when determining how quickly to restore idled production which may keep the differential fairly tight, said IHS Markit analyst Kevin Birn.
Western Canadian refining runs averaged 70% in the second quarter but have dropped below the three-year average in recent weeks, analysts at Tudor, Pickering, Holt & Co said.
Light synthetic crude from the oil sands for August delivery traded at $2.70 under WTI, after Tuesday’s settle of $1.90 under.
Global oil prices edged higher but gains were capped by rising U.S. crude inventories and an increase in coronavirus infections.