Canadian heavy crude’s discount versus West Texas Intermediate (WTI) narrowed on Monday with supplies tight.
Western Canada Select (WCS) heavy blend crude for October delivery in Hardisty, Alberta, traded at $8 per barrel below WTI, according to NE2 Canada Inc. It settled on Friday at $8.10 under.
The heavy differential trades at “unsustainably low” levels and is likely to widen into the autumn as industry shut-ins continue to lift, TD Securities analyst Menno Hulshof said in a note.
Reduced Canadian supplies, due to earlier shut-ins related to the coronavirus pandemic and a pipeline outage that resulted in a production halt at a major oil sands site, have kept the differential tight, along with strong U.S. demand.
Imperial Oil Ltd shut production at its 220,000-barrel-per-day (bpd) Kearl oil sands site in Alberta this month due to an outage of part of the Polaris pipeline in Alberta.
Light synthetic oil from the oil sands for October delivery traded at $1.30 below WTI, wider than Friday’s settle of $1 under.
Global oil prices slipped slightly amid concerns about a stalled global economic recovery and with Libya poised to resume production.
(Reporting by Rod Nickel in Winnipeg, Manitoba Editing by Paul Simao)
