Canadian heavy crude’s discount to West Texas Intermediate (WTI) widened slightly on Tuesday, but held close to a recent four-month high.
Western Canada Select (WCS) heavy blend crude for October delivery in Hardisty, Alberta traded at $12.10 per barrel below the WTI benchmark, according to NE2 Canada Inc, widening from Friday’s settlement of $12.05 per barrel below WTI.
There was no settle on Monday due to the Canadian Labour Day holiday.
The Canadian heavy crude differential is trading close to its narrowest level since early May, helped by news last week that Enbridge Inc’s Line 3 pipeline will increase capacity in October to 620,000 barrels per day (bpd) as a long-delayed expansion nears completion.
Line 3 currently ships around 370,000 bpd and capacity will increase to 760,000 bpd by the end of the year.
The Canadian heavy crude market also gained support from demand for heavy sour grades on the Gulf Coast, where oil and gas companies are still working to get offshore operations back up and running after Hurricane Ida.
Robert Fitzmartyn, head of energy research at Stifel FirstEnergy, said the disruption from the hurricane should create more demand for Canadian barrels.
Light synthetic crude from the oil sands for October delivery last traded at $1.65 per barrel below WTI, tightening from $1.85 per barrel under the benchmark on Friday.
Global oil prices fell, pressured by a strong U.S. dollar and concerns about weak demand in the United States and Asia.