Canadian heavy crude’s discount versus West Texas Intermediate (WTI) widened on Thursday, touching the highest level since early August:
Western Canada Select (WCS) heavy blend crude for January delivery in Hardisty, Alberta, traded at $12.10 per barrel below WTI, according to NE2 Canada Inc, wider than Wednesday’s settlement of $11.95 under.
Slowly increasing production is seen pushing the differential wider, offset partly by demand for heavy oil recovering.
The differential is likely to hover close to $11.80 this month depending on Western Canadian inventory levels, an industry source said. The Alberta government has lifted its mandatory curtailments, which could increase storage levels, the source said.
RBC narrowed its WCS-WTI differential outlook by 5% to $13.14 per barrel in 2021, and by 22% to $10.75 per barrel in 2022, with the Enbridge Line 3 pipeline replacement and Trans Mountain pipeline expansion under construction.
Light synthetic oil from the oil sands for January delivery traded at $4.75 below WTI, wider than Wednesday’s settle of $4.25 under.
Global benchmark Brent crude prices rose 1% to their highest since early March on renewed hopes for a U.S. stimulus deal and after major oil producers agreed to increase output by a modest 500,000 barrels per day (bpd) from January. 29dk2902l