Canadian heavy crude’s discount to West Texas Intermediate (WTI) widened on Thursday but the market remained supported by strong demand for heavy crude on the U.S. Gulf Coast.
Western Canada Select (WCS) heavy blend crude for October delivery in Hardisty, Alberta, traded at $12.05 per barrel below the WTI benchmark, according to NE2 Canada Inc, having settled at $12.00 per barrel below WTI on Wednesday.
One industry source said the Canadian heavy crude market was being supported by high demand for heavy sour grades on the Gulf Coast, where Mars Sour traded at a premium to WTI for the first time in nearly four months.
The Gulf Coast is cleaning up after Hurricane Ida hit earlier this week, but oil and gas companies are straining to get offshore operations back up and running.
Canadian crude prices have also been lifted by news that Enbridge Inc will offer 620,000 barrels per day of capacity on its Line 3 pipeline on October, increasing the volume of crude exported out of western Canada into the United States.
The Line 3 replacement project is expected to be completed by the end of this year and will roughly double the capacity of the pipeline to 760,000 barrels per day.
Global oil prices rose more than $1 a barrel, rebounding on optimism about global economic growth despite the coronavirus pandemic, and after U.S. crude inventories fell more than anticipated.