Canadian heavy crude’s discount narrowed versus West Texas Intermediate (WTI) on Wednesday, as pipelines continued to run below capacity, despite increasing oil production.
Western Canada Select (WCS) heavy blend crude for September delivery in Hardisty, Alberta, traded at $10.25 per barrel below WTI, according to NE2 Canada Inc. It settled the previous day at $11.40 under.
The Enbridge Mainline has refilled much of the space that opened in spring when producers curtailed oil production, but not all of its capacity, keeping spreads in a holding pattern, said Martin King, senior analyst at RBN Energy.
The market appears to be signalling that the Mainline will not refill completely for a few more months as upcoming project maintenance will offset somewhat oil sands producers restoring shut-in barrels, King said.
Light synthetic crude from the oil sands for September delivery traded at $3 a barrel under WTI, wider than Tuesday’s settle of $2.80 under.
Global oil prices fell about 1% after rising earlier in the session as hopes dimmed for a swift stimulus package to relieve the U.S. economy as coronavirus cases increased globally.