Canadian heavy crude’s discount versus West Texas Intermediate (WTI) narrowed on Tuesday, the first day of the monthly trading cycle.
Western Canada Select (WCS) heavy blend crude for October delivery in Hardisty, Alberta, traded at $9.85 per barrel below WTI, according to NE2 Canada Inc. It settled the previous day at $10.60 under.
Heavy oil prices are strong due to reduced output in Venezuela and Mexico, and shut-ins in Canada, a Canadian industry source said. Road repair season, during which asphalt is in high demand, has also kept prices firm, he said.
An RBC Capital Markets survey of investors and executives showed 62% of respondents see the WCS-WTI differential averaging between $11 and $15 per barrel for the balance of 2020.
Light synthetic oil from the oil sands for October delivery traded at $2.50 below WTI, after settling the previous day at $2.75 under.
Global oil prices rose, reversing overnight losses as better-than-expected U.S. manufacturing activity data spurred hope for a post-pandemic economic recovery, and as analysts forecast a sixth weekly drawdown in U.S. crude inventories.