Canadian heavy crude’s discount versus West Texas Intermediate (WTI) narrowed slightly on Thursday, the first day of the monthly trading cycle, after news of a big sale to India.
Western Canada Select (WCS) heavy blend crude for November delivery in Hardisty, Alberta, traded at $10.75 per barrel below WTI, according to NE2 Canada Inc. It settled on Wednesday at $10.95 under.
Indian oil refiner Reliance Industries has agreed to purchase 2 million barrels of Canadian heavy crude per month, three industry sources said, as Venezuelan production looked to decline further.
An industry source said the Reliance supply deal did not support prices more because the same volume of crude is exported from Western Canada regardless of who the buyers are.
The Reliance deal should slow further widening of the WCS-WTI differential as production comes back online after Canadian oil curtailments, TD Energy analyst Menno Hulshof said.
Light synthetic oil from the oil sands for November delivery traded at $4.25 below WTI, wider than Wednesday’s settle of $2.05 under.
Alberta’s oil inventories dropped below the three-year average in August as maintenance activities picked up in the oil sands, Tudor Pickering Holt & Co said.
Global oil prices fell as rising coronavirus cases around the world dampened the demand outlook, and a rise in OPEC output last month also pressured prices.
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